PART II AND III 2 tm2112334d1_partiiandiii.htm PART II AND III

 

FORM 1-A DISCLOSURE FORMAT

PART II 

OFFERING CIRCULAR

Groundfloor Finance Inc.

 

Forty-Five Series of Limited Recourse Obligations 

Totaling $7,916,080

 

Dated: April 6, 2021

 

This Post-Qualification Offering Circular Amendment No. 79 (this “PQA”), made on the Form 1-A disclosure format, amends the offering circular of Groundfloor Finance Inc., dated December 29, 2017, as qualified on January 4, 2018, and as may be amended and supplemented from time to time (the “Offering Circular”), to add additional securities to be offered pursuant to the Offering Circular. This PQA relates to the offer and sale of up to an additional $7,916,080 in aggregate amount of Limited Recourse Obligations (the “LROs”) to be issued by Groundfloor Finance Inc. (the “Company,” “we,” “us,” or “our”). Unless otherwise defined below, capitalized terms used herein shall have the same meanings as set forth in the Offering Circular. See “Incorporation by Reference of Offering Circular” below.

 

We make LROs available for investment on our web-based investment platform www.groundfloor.com (the “Groundfloor Platform”). Our principal offices and mailing address are located at 600 Peachtree Street, Suite 810, Atlanta, GA 30308. The phone number for these offices is (404) 850-9225.

 

We will issue the LROs in distinct series, each corresponding to a real estate development project (each, a “Project”) financed by a commercial loan from us (each, a “Loan”). The borrower for each Project is a legal entity (the “Borrower”) that owns the underlying property and has been organized by one or more individuals (each, a “Principal”) that own and operate the Borrower. This PQA relates to the offer and sale of each separate series of LROs corresponding to the Projects for which we extend Loans, as described below (the “Offering”).

 

The LROs will be unsecured special, limited obligations of the Company. The LROs are not listed on any national securities exchange or on the over-the-counter inter-dealer quotation system. There is no market for the LROs. Our obligation to make payments on a LRO is limited to an amount equal to each holder’s pro rata share of amount of payments, if any, actually received on the corresponding Loan, net of certain fees and expenses retained by us. See the sections titled “General Terms of the LROs,” “The LROs Covered by this Offering Circular,” and “Project Summaries” of the Offering Circular, as amended hereby, for the specific terms of the LROs covered by this PQA.

 

We do not guarantee payment of the LROs in the amount or on the time frame expected. The LROs are not obligations of the Borrowers or their Principals, and we do not guarantee payment on the corresponding Loans. We have the authority to modify the terms of the corresponding Loans which could, in certain circumstances, reduce (or eliminate) the expected return on your investment. See the “General Terms of the LROs—Administration, Service, Collection, and Enforcement of Loan Documents” section on page 106 of the Offering Circular.

 

The LROs are speculative securities. Investment in the LROs involves significant risk, and you may be required to hold your investment for an indefinite period of time. You should purchase these securities only if you can afford a complete loss of your investment. See the “Risk Factors” section on page 12 of the Offering Circular.

 

Generally, no sale may be made to you in this offering to the extent that the aggregate purchase price you pay is more than 10% of the greater of your annual income or net worth. Different rules apply to accredited investors and non-natural persons. Before making any representation that your investment does not exceed applicable thresholds, we encourage you to review Rule 251(d)(2)(i)(c) of Regulation A. For general information on investing, we encourage you to refer to www.investor.gov.

 

We will commence the offering of each series of LROs promptly after the date this PQA is qualified by posting on the Groundfloor Platform a separate landing page corresponding to each particular Loan and Project (each, a “Project Summary”). The offering of each series of LROs covered by this PQA will remain open until the earlier of (1) 30 days, unless extended, or (2) the date the offering of a particular series of LROs is fully subscribed with irrevocable funding commitments (the “Offering Period”); however, we may extend the Offering Period for a particular series of LROs in our sole discretion (with notice to potential investors) up to a maximum of 45 days. We will notify investors who have previously committed funds to purchase such series of LROs of any such extension by email and will post a notice of the extension on the corresponding Project Summary on the Groundfloor Platform.

 

This Offering is being conducted on a “best-efforts” basis, which means that our officers will use their commercially reasonable best efforts in an attempt to sell the LROs. Such officers will not receive any commission or any other remuneration for these sales. In offering the LROs on our behalf, the officers will rely on the safe harbor from broker-dealer registration set out in Rule 3a4-1 under the Securities Exchange Act of 1934, as amended.

 

 

 

THE UNITED STATES SECURITIES AND EXCHANGE COMMISSION DOES NOT PASS UPON THE MERITS OF OR GIVE ITS APPROVAL TO ANY SECURITIES OFFERED OR THE TERMS OF THE OFFERING, NOR DOES IT PASS UPON THE ACCURACY OR COMPLETENESS OF ANY OFFERING CIRCULAR OR OTHER SOLICITATION MATERIALS. THESE SECURITIES ARE OFFERED PURSUANT TO AN EXEMPTION FROM REGISTRATION WITH THE COMMISSION; HOWEVER, THE COMMISSION HAS NOT MADE AN INDEPENDENT DETERMINATION THAT THE SECURITIES OFFERED HEREUNDER ARE EXEMPT FROM REGISTRATION.

 

   Offering price
to the public		   Underwriting
discounts and
commissions		  Proceeds to
issuer(1)(2)		   Proceeds to
other
persons
Per Unit  $10.00   N/A  $10.00   N/A
Total Minimum  $0.00   N/A  $0.00   N/A
Total Maximum  $7,916,080   N/A  $7,916,080   N/A

  

(1) We estimate all expenses for this Offering to be approximately $1,000, which will not be financed with the proceeds of the Offering.

(2) Assumes no promotions or discounts applied to any offerings covered by this PQA.

 

 

 

Incorporation by Reference of Offering Circular

 

The Offering Circular, including this PQA, is part of an offering statement (File No. 024-10753) that we filed with the Securities and Exchange Commission. We hereby incorporate by reference into this PQA all of the information contained in the following:

 

1.Part II of the Offering Circular, including the form of LRO Agreement beginning on page LRO-1 thereof to the extent not otherwise modified or replaced by offering circular supplement and/or post-qualification amendment.

 

2.Form 1-K, for Groundfloor Finance Inc., covering the periods ending December 31, 2020 and December 31, 2019.

 

3.1- A POS for PQA 78 filed March 11, 2021.

 

Note that any statement that we make in this PQA (or have made in the Offering Circular) will be modified or superseded by any inconsistent statement made by us in a subsequent offering circular supplement or post-qualification amendment.

 

The LROs Covered by the Offering Circular and Use of Proceeds

 

The following disclosure is added on pages 109 and 110 of the Offering Circular under the table included under “The LROs Covered by this Offering Circular” and “Use of Proceeds,” respectively:

 

The table below lists the additional Projects covered by this PQA. Each series of LROs is denominated by the corresponding Project’s name.

 

Series of LROs/Project  Aggregate Purchase
Amount/Loan
Principal		 
2214 WOODLAND AVENUE, KANSAS CITY, MO 64108   62,830 
7545 WILDER AVENUE, JACKSONVILLE, FL 32208   80,500 
707 ESSEX COURT #1, SANFORD, NC 27332   82,210 
707 ESSEX COURT #2, SANFORD, NC 27332   82,210 
2671 JOHNSON STREET, LITHONIA, GA 30058   83,500 
2541 TONBO TRAIL #2, WILMINGTON, NC 28409   85,535 
2541 TONBO TRAIL #3, WILMINGTON, NC 28409   85,535 
2541 TONBO TRAIL #1, WILMINGTON, NC 28409   86,000 
252 RODILIN DRIVE, PITTSBURGH, PA 15235   86,250 
2645 EDGEWOOD AVENUE WEST, JACKSONVILLE, FL 32209   99,230 
7520 JOHN F KENNEDY DR. E., JACKSONVILLE, FL 32219   100,000 
3458 ROCKHAVEN CIR. NE #5, ATLANTA, GA 30324   100,000 
150 RIVER RIDGE ROAD, NEWRY, SC 29665   100,210 
5162 SHIRLEY AVENUE, JACKSONVILLE, FL 32210   108,000 
3458 ROCKHAVEN CIR. NE #3, ATLANTA, GA 30324   110,000 
3458 ROCKHAVEN CIR. NE #4, ATLANTA, GA 30324   110,000 
17154 LOGAN CAVE ROAD, SILOAM SPRINGS, AR 72761   122,320 
6912 SANDALWOOD DRIVE, PORT RICHEY, FL 34668   134,140 
12425 BETHEL BLACKTOP ROAD, FARMINGTON, AR 72730   135,080 
878 BLUEJAY STREET, PALM BAY, FL 32908   136,130 
458 ROCKHAVEN CIR. NE #2, ATLANTA, GA 30324   150,190 
639 MOUNTAIN PLACE, ALBEMARLE, NC 28001   151,990 
1110 OAK KNOLL TERRACE SE, ATLANTA, GA 30315   164,210 
147 MECHANIC ST, GARDNER, MA 01440   169,060 
1611 SIGNET DRIVE, EULESS, TX 76040   172,750 
2416 KINGSTON STREET, ARLINGTON, TX 76015   173,250 
132 J Y CARMICHAEL RD, NEWNAN, GA 30277   182,910 
10622 AKERS DRIVE NORTH, JACKSONVILLE, FL 32225   184,000 
1258 CAMPBELLTON ROAD SW, ATLANTA, GA 30310   184,550 
128 NATHAN ROAD SW LOT 02, ATLANTA, GA 3033   187,720 
550 MEADOWVALE DR, ORLANDO, FL 32825   193,740 
7327 SANTIAGO STREET, HOUSTON, TX 77023   211,240 
7325 SANTIAGO STREET, HOUSTON, TX 77023   214,850 
2301 N DECATUR ROAD #1, DECATUR, GA 30033   226,810 
2301 N DECATUR ROAD #2, DECATUR, GA 30033   226,820 
523 JOSEPH E. LOWERY BLVD NW, ATLANTA, GA 30314   229,740 
195 BELLEVUE LOOP, FAYETTEVILLE, GA 30215   229,970 
176 VANIRA AVENUE SOUTHEAST, ATLANTA, GA 30315   277,870 
1014 NORTH HARDING AVENUE, CHICAGO, IL 60651   287,230 
458 ROCKHAVEN CIR. NE #1, ATLANTA, GA 30324   300,000 
3350 LAWRENCE STREET, SCOTTDALE, GA 30079   324,260 
4227 MATISSE LANE, FAIRBURN, GA 30213   325,040 
859 GLENWOOD AVENUE, CINCINNATI, OH 45229   346,390 
0 FONTAINE RD, MABLETON, GA 30126   379,000 
2618 NORTH DAYTON STREET, PHOENIX, AZ 85006   432,810 
Total  $7,916,080 

 

 

 

Project Summaries

 

Each Project Summary attached below is included in the Offering Circular following page PS-964.

 

 

 

PROJECT SUMMARIES FOR PQA NO. 79

 

 

 

11 $62.830 I Purchase II First Lien BORROWER ------------------------------------------------------------Project Cost (!) .•>. !! Vi ew larger map .. ,.f. E 21st St The Borrower intends to use the loan proceeds to purchase and renovate the property.Upon completion, the Borrower intends to sell the property to repay the Groundfloor loan. E 22ndSt .. 5 • > £ 2Jrd St ;: ;;; WF.:NOcll St 1. Map data @2021Google Click here to view the LRO Agreement Terms of Use «> TotalDebt (!) Revenue (!) GROUNDFLOOR HISTORY * HISTORICAL AVERAGES Completed Projects Average Project 1.._1 .11 II $O I I o ° CONTAINED THEREIN IS HELPFUL WE DO NOTUSE IT AS THE SOLE BASISFORA FUNDING DECtSION THE COMPANY PlAYED NO ROLE IN THE PREPARATION OF ANY OF THEVALUATION SOURCES OR ANY OTHER MATERIALS PROVIDEDBY THE BORROWER WHILE WE BELIEVE THE DATA UA KC EVE LLCFINANCIAL DATAPROJECTSI REVENUE DATE OF FORMATION * 06/13/2018 Gross Margin% (!) PRINCIPAL DarylMcCoy... FOCUS Loans Funded (!)Loans Repaid (!)PerYear (!)Revenue (!) On Time Average ProjectAverage Total Repayment (!)Time (!)Project Costs (!) 10.0%I.._N/..II $O ,ending 2020 0.0% /20 PROJECT SPECIFIC RISK FACTORS • The Borrower was advanced the money it needed to purchase this property on February 25,2021by Groundfloor Finance Inc.("Groundfloo·r:"we;·"us;·or "our") or a wholly-owned subsidiary of Groundfloor.The Borrower is now in possession of the property.If this offering is fully subscribed,Groundfloor will continue to administer and service the loan as further described in the Offering Circular. • The renovation of the property may be extensive,and therefore subject to delays and other unexpected issues. • The renovation will require permitting,and permits may not be obtained on time or may be denied. • The Borrower has not completed or sold any projects in the past year. As such, the Borrower's average revenue,costs,and margins cannot be calculated. • The Principalhas not yet completed or sold any projects.As such,the Principal's average revenue,costs,and margins cannot be calculated. • Please consult the Offering Circular for further discussion of general risk factors. CLOSING CONDITIONS • loan is conditioned upon a clean title search and valid title insurance at the time of close. DEVELOPER FEES • GROUNDFlOOR generally charges borrowers between 2% and 6% of the principal amount of the loan for our services. • GROUNDFlOOR does not take a 'spread' on any part of the interest payments. • Developers may capitalize the cost of closing into the principalamount of their request.These closing costs typically range from $500 to $1500. • Unless otherwise limited by applicable law,GROUNDFLOOR will charge a penalty of 2% for any extension made to the borrower.See GROUNDFLOOR 'Fees and Expenses' in the Offering Circular SEC FILING INFORMATION • The series of lROs corresponding to this Project are offered pursuant to Post Qualification Amendment No.79 to the Offering Circular dated December 29,2017 (each,as amended and supplemented from time to time), including the documents incorporated by reference therein.You may access and review these documents on the InternalFilings Directory located on our Platform. PROPERTY DESCRIPTION msas L:rtv worknouse V E 20111 St Address: 2214 WOODLAND AVENUE.KANSAS CITY,MO 64108 E21sl St ll "" E22nd T• .;; I -!! > • •P h 0 'fp S£2 h St INVEST NOW As Complete (ARV) $125,000 Broker 's Price Opinion Borrower Provided Appraisal Borrower Provided Comps Certified Independent Appraisal VAlUATION REPORTS The following factors determine in part how the loan was graded: (in descendingorder of importance) LoanToARVScore (!)10 Quality of Valuation Report4 Skin-in-the-Game (!)10 location 8 Borrower Experience5 Borrower Commitment (!)1 GRADE FACTORS FINANCIAOl VERVIEW After Repair Value (ARV) (!) $125,000 TotalCosts (!) $124,900 0% ----Skin-in-the First Lien loan Cushion(!) Game(!) Purchase Price$125,000LoanToARV50.3% Purchase Date02/25/2021Loan To Total50.3% RateProjected TermLoanToARV Loan Amount Investors PurposeLoan Position TotalLoan Amount Repayment Terms UAKCEVE LLC DarylMcCoy - principal Click here to view the LRO Agreement INVEST NOW Balloon payment-principal and interest returned on repayment I due at maturity.

 

 PS-964 

 

 

 

 

c_ F_ir-st_L_ie_n _JII $80,500 ----------------------------------------------------------------------------------------------------------------------03/01/2021 l1oo.o% 1 Purchase Date Project Cost (!) p Borrower intends to sell the property to repay the Groundfloor loan. hoppe T EducationalIns E65thSt ,: - I 2.. 9! .. Value of Properties (!) TotalDebt (!) Completed Projects (!) Revenue (!) GROUNDFLOOR HISTORY * HISTORICAL AVERAGES D I 0 Completed Projects Average Project 1 1_11 II 4 $157K o II CONTAINED THEREINISHELPH.,WE: DONOT vSE IT AS THE SOLE BASIS F-ORA FUNDING DECISION. THCOMPANY PLAYED NOROLE: IN THE PREPARATION OF ANY OF THVALUATIONSOURC. SORANYOTHERMATERIALSPROVIUE:D BY THBORROWER. WHILE WE BtliE:VE: THE DA-rA * 'INFORMATION BELOW ISSUPPLIED BY THEBORROWER ANDIS NOT VERIFIED. BORROWERS REPRESENT AND WARRANT THAT INFORMATIONSUPPLIED IS ACCURATE. PEACHY PELICAN PROPERTIES LLCFINANCIAL DATA PROJECTS/REVENUE DATE OF FORMATION * 05/17/2019 Unsold Inventory (!) Gross Margin% (!) PRINCIPAL Gianina Romito FOCUS Buy&HoldLoans Funded (!) Loans Repaid (!) Per Year (!) Revenue (!) On Time Average ProjectAverage Total Repayment (!) Time (!) Project Costs (!) 10.0%1, _s_m_on_th_s_ , l$141K , ending 2020 27.0% $173K $300K Reporting period:2020 Reportingdate:12 31/20 UNLESS NOTEDWITH A BORROWER SUMMARY PROJECT SPECIFIC RISK FACTORS • The Borrower was advanced the money it needed to purchase this property on March 1,2021by Groundfloor Finance Inc. ("Groundfloor ·"we," "us," or "our") or a wholly-owned subsidiary of Groundfloor.The Borrower is now in possession of the property.If this offering is fully subscribed,Groundfloor will continue to administer and service the loan as further described in the Offering Circular. • The renovation of the property may be extensive,and therefore subject to delays and other unexpected issues. • The renovation will require permitting,and permits may not be obtained on time or may be denied. • Please consult the Offering Circular for further discussion of general risk factors. CLOSING CONDITIONS • Loan is conditioned upon a clean title search and valid title insurance at the time of close. DEVELOPER FEES • GROUNDFLOOR generally charges borrowers between 2% and 6% of the principal amount of the loan for our services. • GROUNDFLOOR does not take a 'spread' on any part of the interest payments. • Developers may capitalize the cost of closing into the principal amount of their request. These closing costs typically range from $500 to $1500. • Unless otherwise limited by applicable law,GROUNDFLOOR will charge a penalty of 2% for any extension made to the borrower.See GROUNDFLOOR 'Fees and Expenses' in the Offering Circular SEC FILING INFORMATION • The series of LROs corresponding to this Project are offered pursuant to Post Qualification Amendment No.79 to the Offering Circular dated December 29,2017 (each,as amended and supplemented from time to time), including the documents incorporated by reference therein. You may access and review these documents on the InternalFilings Directory located on our Platform. Seafarers Marina \;Address: 7545 WILDER AVENUE,JACKSONVILLE,FL 32208 Garden Shack 9 The Borrower intends to use the loan proceeds to purchase and renovate the property.Upon completion, the W 66111 Sl ..ft North Florida oseph's Pizza R E <i-"' c:'J Map data ©2021 Terms of Use Report a map error Click here to view the LRO Agreement INVEST NOW View larger ma As Complete (ARV) $120,000 Broker's Price Opinion Borrower Provided Appraisal Borrower Provided Comps VALUATION REPORTS The followingfactors determine in part how the loan was graded: (in descendingorder of importance) LoanTo ARV Score (!) 10 Quality of Valuation Report4 Skin-in-the-Game (!) 0 10 Location 8 Borrower Experience 5 Borrower Commitment (!) 1 GRADE FACTORS FINANCIAL OVERVIEW Afterir Value (ARV) (!) $120,000 $80,500 0% --------------------------------Skin-in-theFirst Lien Loan Cushion (!) Game (!) Purchase Price (!) $72,080 Loan To ARV (!) 67.1% Loan To Total Rate LoanToARVLoan Amount Investors Purpose Loan PositionTotal Loan AmountRepayment Terms BORROWER PeachY. Pelican ProQerties LLC Gianina Romito-principal Click here to view the LRO Agreement INVEST NOW Purchase & Renovation Balloon payment-principal and interest returned on repayment I due at maturity.

 

 PS-965 

 

 

 

 

210 BORROWER L FINANCIAL OVERVIEW - Borrower Experience 5 Game CD 80.3% 01/06/2021 Project Cost PROPERTY DESCRIPTION The Borrower intends to use the l oan proceeds to complete a new construction.Upon completi on,the Borrower i ntends to sell the property to repay the Groundfloor loan. Click here to view the LRO Agreement Map data ®2021 Terms of Use R eport a map error 11!1f . IDorkv MISCELLANEOUS BORROWER SUMMARY UNLESSNOTEDWITHA 'INFORMATIONBELOW ISSUPPLIEDBYTHE BORROWER AND ISNOT VERIFIED. BORROWERS REPRESENTAND WARRANT THAT INFORMATION SUPPLIED IS ACCURATE. HISTORICAL AVERAGES GROUNDFLOOR HISTORY * Daniel Brody Compl eted Projects Average Project 2 $O CONTAINEDTHEREIN IS HELPFUL,WE DO NOT USE IT AS THE SOLE BASIS FORA FUNDING DECISION. THECOMPANYPLAYED NO ROLE IN THE PREPARATIONOF ANYOFTHE VALUATION SOURCESOR ANY OTHERMATERIALS PROVIDED BYTHE BORROWER.WHILE WE BELIEVE THE DATA THE J&R GROUP LLCFINANCIAL DATA PROJECTS I REVENUE DATE OF FORMATION * 09/23/2019 Gross Margin% CD IPRINCIPAL FOCUS Single FamilyLoans Funded CDLoans Repaid CDPerYear CDRevenue CD L l------'11°IIoII On TimeAverage Project Average Total Repayment CDTime CDProject Costs CD 10.0%L_l_o_m_o_nt_hs_--'11$0 Reportingperiod:three years ending 2020 0.0% Reportingperiod:2020 Reportingdate:12/31/20 PROJECT SPECFI IC RISK FACTORS • The Borrower was advanced the money i t needs to begi n constructi on of this property on January 6,2021by Groundfloor Finance Inc.("Groundfloor;'"we;'"us;'or "our") or a wholly-owned subsidiary of Groundfloor. The Borrower will has begun constructi on of the property.If thi s offeringi s fully subscribed,Groundfloor will continue to administer and service the loan as further described in the OfferingCircular. • The construction of the property may be extensi ve,and therefore subject to delays and other unexpected i ssues. • The construction willrequire permitting, and permi ts may not be obtained on time or may be denied. • There will be multiple l oans on this project,each representing subsequent draws. The loans will range from $70,000 to $90,000. The Financial Overview box represents the aggregate amount of all loans to be secured by this property,gi ving a complete financial picture of the project. • There is no exi sti ng structure on this property,or if there is,i t will be demolished, and a new structure built in i ts pl ace. • The event of default on one Groundfloor note secured by this property will tri gger default on all Groundfloor notes secured by this property. All LRO holders investing in LROs corresponding to notes secured by this property share the same priority in any recovery and recovered proceeds will be distributed on a pro-rata basis. • This loan represents the first draw for the construction project and is secured by an indi vidual note. • Each draw on this project i s structured as an individual loan.We will fund each draw from our own capital or credit facilities as and when requested by the Borrower,provided conditi ons for each draw are met as described in our Offering Circular.Once a draw has been approved and funded,we will then sell the corresponding seri es of LROs on our platform, each of which will be due 1 2 months from the time such seri es of LRO i s deemed issued,as described in our Offering Circular.Subsequent draws are expected to be requested every two months from the date we advanced the first draw,but may be requested sooner,or later, depending on the progress of constructi on. • The Borrower has not compl eted or sold any projects in the past year.As such,the Borrower's average revenue,costs, and margins cannot be calculated. • The Principal has not yet compl eted or sold any projects.As such,the Principal's average revenue,costs,and margins cannot be calculated. • Please consult the Offering Circul ar for further discussi on of general ri sk factors. CLOSING CONDITIONS • Loan is conditi oned upon a clean ti tle search and valid title i nsurance at the time of close. DEVEOlPER FEES • GROUNDFLOOR generally charges borrowers between 2% and 6% of the principal amount of the l oan for our services. • GROUNDFLOOR does not take a 'spread' on any part of the interest payments. • Developers may capitalize the cost of closing into the principal amount of their request.These closing costs typically range from $500 to $1500. • Unless otherwise limited by applicable l aw,GROUNDFLOOR will charge a penalty of 2% for any extension made to the borrower. See GROUNDFLOOR 'Fees and Expenses' in the Offering Circular SEC FILING INFORMATION • The series of LROs correspondi ng to this Project are offered pursuant to Post Qualification Amendment No.79 to the Offering Circular dated December 29,201 7 (each,as amended and supplemented from time to time),including the documents i ncorporated by reference therein. You may access and review these documents on the Internal Filings Directory located on our Pl atform. View larger map IAddress: 707 ESSEX COURT #1,SANFORD,NC 27332 ' :raxton's QGo gle INVEST NOW As Complete (ARV) $235,000 Broker's Price Opinion Borrower Provided Appraisal Borrower Provided Comps After RepairValue (ARV) CD$235,000 $31,580 Total· Costs$203,420 0% ----Skin-in-theFirst lien Loan Cushion CD Purchase Price$5,000Loan To ARV70.0% Purchase DateLoan To Total CD CD CD VALUATION REPORTS The following factors determine in part how the loan was graded: (in descendingorder of importance) Loan To ARV Score CD10 Quality of ValuationReport4 Skin-in-the-Game CD10 location8 Borrower Commi tment CD1 GRADE FACTORS Rate loan ToARV loan AmountInvestors Purpose loan Position Total oan Amount Repayment Terms F_i_rs_t_L_i e_n JII $82,,--:8a-..l:.l..o_o_n_p_ay_m_e_n_t-p_ -ri nc_i_p_al_a_n_d_i_nte_r_e_s-t-, . .retu rned on repayment/ due at matu r i ty. The J&R GrOUP-llC Dani el Brody-principal Click here to view the LRO Agreement INVEST NOW New Construction

 

 PS-966 

 

 

 

 

210 BORROWER L FINANCIAL OVERVIEW - Borrower Experience 5 Game CD 01/06/2021 80.3% Purchase Date Project Cost PROPERTY DESCRIPTION The Borrower intends to use the l oan proceeds to complete a new construction.Upon completi on,the Borrower i ntends to sell the property to repay the Groundfloor loan. Click here to view the LRO Agreement Map data ®2021 Terms of Use R eport a map error 11!1f . IDorkv MISCELLANEOUS BORROWER SUMMARY UNLESSNOTEDWITHA 'INFORMATIONBELOW ISSUPPLIEDBYTHE BORROWER AND ISNOT VERIFIED. BORROWERS REPRESENTAND WARRANT THAT INFORMATION SUPPLIED IS ACCURATE. HISTORICAL AVERAGES GROUNDFLOOR HISTORY * Daniel Brody Compl eted Projects Average Project 2 $O CONTAINEDTHEREIN IS HELPFUL,WE DO NOT USE IT AS THE SOLE BASIS FORA FUNDING DECISION. THECOMPANYPLAYED NO ROLE IN THE PREPARATIONOF ANYOFTHE VALUATION SOURCESOR ANY OTHERMATERIALS PROVIDED BYTHE BORROWER.WHILE WE BELIEVE THE DATA THE J&R GROUP LLC FINANCIAL DATA PROJECTS I REVENUE DATE OF FORMATION * 09/23/2019 Gross Margin% CD IPRINCIPAL FOCUS Single FamilyLoans Funded CDLoans Repaid CDPerYear CDRevenue CD L l------'11°IIoII On TimeAverage Project Average Total Repayment CDTime CDProject Costs CD 10.0%L_l_o_m_o_nt_hs_--'11$0 Reportingperiod:three years ending 2020 0.0% Reportingperiod:2020 Reportingdate:12/31/20 PROJECT SPECIFIC RISK FACTORS • The Borrower was advanced the money i t needs to begi n constructi on of this property on January 6,2021by Groundfloor Finance Inc.("Groundfloor;'"we;'"us;'or "our") or a wholly-owned subsidiary of Groundfloor. The Borrower will has begun constructi on of the property.If thi s offeringi s fully subscribed,Groundfloor will continue to administer and service the loan as further described in the OfferingCircular. • The construction of the property may be extensi ve,and therefore subject to delays and other unexpected i ssues. • The construction willrequire permitting, and permi ts may not be obtained on time or may be denied. • There will be multiple l oans on this project,each representing subsequent draws. The loans will range from $70,000 to $90,000. The Financial Overview box represents the aggregate amount of all loans to be secured by this property,gi ving a complete financial picture of the project. • There is no exi sti ng structure on this property,or if there is,i t will be demolished, and a new structure built in i ts pl ace. • The event of default on one Groundfloor note secured by this property will tri gger default on all Groundfloor notes secured by this property. All LRO holders investing in LROs corresponding to notes secured by this property share the same priority in any recovery and recovered proceeds will be distributed on a pro-rata basis. • This loan represents the second draw for the construction project and is secured by an individual note. • Each draw on this project i s structured as an individual loan.We will fund each draw from our own capital or credit facilities as and when requested by the Borrower,provided conditi ons for each draw are met as described in our Offering Circular.Once a draw has been approved and funded,we will then sell the corresponding seri es of LROs on our platform, each of which will be due 1 2 months from the time such seri es of LRO i s deemed issued,as described in our Offering Circular.Subsequent draws are expected to be requested every two months from the date we advanced the first draw,but may be requested sooner,or later, depending on the progress of constructi on. • The Borrower has not compl eted or sold any projects in the past year.As such,the Borrower's average revenue,costs, and margins cannot be calculated. • The Principal has not yet compl eted or sold any projects.As such,the Principal's average revenue,costs,and margins cannot be calculated. • Please consult the Offering Circul ar for further discussi on of general ri sk factors. CLOSING CONDITIONS • Loan is conditi oned upon a clean ti tle search and valid title i nsurance at the time of close. DEVElOPER FEES • GROUNDFLOOR generally charges borrowers between 2% and 6% of the principal amount of the l oan for our services. • GROUNDFLOOR does not take a 'spread' on any part of the interest payments. • Developers may capitalize the cost of closing into the principal amount of their request.These closing costs typically range from $500 to $1500. • Unless otherwise limited by applicable l aw,GROUNDFLOOR will charge a penalty of 2% for any extension made to the borrower. See GROUNDFLOOR 'Fees and Expenses' in the Offering Circular SEC FILING INFORMATION • The series of LROs correspondi ng to this Project are offered pursuant to Post Qualification Amendment No.79 to the Offering Circular dated December 29,201 7 (each,as amended and supplemented from time to time),including the documents i ncorporated by reference therein. You may access and review these documents on the Internal Filings Directory located on our Pl atform. View larger map IAddress: 707 ESSEX COURT #2,SANFORD,NC 27332 ' :raxton's QGo gle INVEST NOW As Complete (ARV) $235,000 Broker's Price Opinion Borrower Provided Appraisal Borrower Provided Comps After RepairValue (ARV) CD$235,000 $31,580 Total· Costs$203,420 0%----Skin-in-the-First lien Loan Cushion CD Purchase Price$5,000Loan To ARV70.0% Loan To Total CD CD CD VALUATION REPORTS The following factors determine in part how the loan was graded: (in descendingorder of importance) Loan To ARV Score CD10 Quality of ValuationReport4 Skin-in-the-Game CD10 location8 Borrower Commi tment CD1 GRADE FACTORS Rate loan ToARV loan AmountInvestors Purpose loan Position Total oan Amount Repayment Terms F_i_rs_t_L_i e_n JII $82,,--:8a-..l:.l..o_o_n_p_ay_m_e_n_t-p_ -ri nc_i_p_al_a_n_d_i_nte_r_e_s-t-, . .retu rned on repayment/ due at matu r i ty. The J&R GrOUP-llC Dani el Brody-principal Click here to view the LRO Agreement INVEST NOW New Construction

 

 PS-967 

 

 

 

 

500 L - Skin-in-the-Game (!) 10 Project Cost " T --'... "4' ). 2671 Johnson St, , . \ o The Borrower intends to use the loan proceeds to purchase and renovate the property. Upon completion,the {0 :\\• 'g Co_,Y. II' 0Retr Mapdcr.a ®2021Goog!e"" Terms of Use Report a map error Click here to view the LRO Agreement Value of Properties (!)Total Debt Q) Revenue ® HISTORICAL AVERAGES GROUNDFLOOR HISTORY * Donald Phoenix Compl eted Projects Average Project CONTAINEDTHEREIN IS HELPFUL,WE DO NOT USE IT AS THE SOLE BASIS FORA FUNDING DECISION. THECOMPANYPLAYED NO ROLE IN THE PREPARATIONOF ANY OFTHE VALUATION SOURCESOR ANY OTHERMATERIALS PROVIDED BY THE BORROWER.WHILE WE BELIEVE THE DATA BORROWERS REPRESENTAND WARRANT THAT INFORMATION SUPPLIED IS ACCURATE. THE SANKOFA GROUP,LLC FINANCIADl ATAPROJECTS /REVENUE DATE OF FORMATION * 05/05/2018 Gross Margin% ® IPRINCIPAL FOCUS Buy& Hold Loans Funded (!)Loans Repaid (!)PerYear (!)Revenue ® L,l5 ,II3 II2 II$95K On TimeAverage Project Average Total Repayment (!) Time Q)Project Costs ® 167.0%_'-l _ 1 2 mon_th_s_ ,ll$67.9K Reportingperiod:three years ending 2020 32.0% $524.5K $329K Reportingperiod:2020 Reportingdate:12/31/20 UNLESSNOTEDWITHA * ,INFORMATIONBELOW ISSUPPLIEDBYTHE BORROWER AND ISNOT VERIFIED. BORROWER SUMMARY PROJECT SPECIFIC RISK FACTORS o The Borrower was advanced the money it needed to purchase this property on February 11,2021by Groundfloor Finance Inc.("Groundfloor;'"we';"us;'or "our") or a wholly-owned subsidiary of Groundfloor.The Borrower is now in possession of the property. If this offering is fully subscribed,Groundfloor will continue to administer and service the loan as further described in the Offering Circular. • The renovation of the property may be extensive,and therefore subject to delays and other unexpected issues. • The renovation will require permitting,and permits may not be obtained on time or may be denied. • The borrower has had late repayments,but has repaid all loans in full,with all interest and fees due. • Please consult the Off eringCircular for further discussion of general risk factors. CLOSING CONOITIONS • Loan is conditioned upon a clean title search and valid title insurance at the time of close. DEVELOPER FEES • GROUNDFLOOR generally charges borrowers between 2% and 6% of the principal amount of the loan for our services. • GROUNDFLOOR does not take a 'spread' on any part of the interest payments. • Developers may capitalize the cost of closing into the principal amount of their request.These closing costs typically range from $500 to $1500. • Unless otherwise limited by applicable l aw,GROUNDFLOOR will charge a penalty of 2% for any extension made to the borrower. See GROUNDFLOOR 'Fees and Expenses' in the Offering Circular SEC FILING INFORMATION o The series of LROs corresponding to this Project are offered pursuant to Post Qualification Amendment No.79 to the Offering Circular dated December 29,2017 (each,as amended and supplemented from time to time),including the documents incorporated by reference therein.You may access and review these documents on the Internal Filings Directory located on our Platform. MISCELLANEOUS oil View larger map .0?. <>Address: 2671JOHNSON STREET,LITHONIA, GA 30058 Ylithonia, GA 30058 ..,,..,., Borrower intends to sell the property to repay the Groundfloor loan. d o"'"·""r' Go gle•"' Coil INVEST NOW ·.;; ., a"!-'i! 'i PROPERTY DESCRIPTION As Complete (ARV) $120,000 Broker's Price Opinion Borrower Provided Appraisal Borrower Provided Comps After RepairValue (ARV) (!) $120,000 TotalCosts$98,500 $15,000 0% ----Skin-in-theFirst lien Loan Cushion (!) Game (!) Purchase Price$75,000 LoanToARV69.6% Purchase Date02/11/2021 Loan To Total84.2% (!) {2) (!) VALUATION REPORTS The followingfactors determine in part how the loan was graded: (in descending order of importance) LoanToARVScore (!) 10 Quality of ValuationReport4 location8 Borrower Experience5 Borrower Commitment (!)1 GRADE FACTORS FINANCIAL OVERVIEW Rate loanToARVloan Amount Investors Purpose loan Position Total oan AmountRepayment Terms BORROWER F_i_rs_t_L_ie_n JII83,r-B-'a"l'l-o_o_n pa_y_m_en-t --p--ri n_c_i_p_a l_a_n_d_i_nte_r_e_s-t-, . .retu rned on repayment/ due at maturity. The Sankofa GrouQ,lLC Donald Phoenix - principal Cli ck here to vi ew the LRO Agreement INVEST NOW Purchase & Renovation

 

 PS-968 

 

 

 

 

-= aT =• BORROWER FINANCIAOl VERVIEW 01/25/2021 73.5% Purchase Date Project Cost PROPERTY DESCRIPTION View larger map PROPERTY PHOTOS MISCEllANEOUS Circular.Subsequent draws are expected to be requested every two months from the date we advanced the first draw,but may be requested sooner,or later, BORROWER SUMMARY UNLESSNOTEDWITHA * 'INFORMATIONBELOW ISSUPPLIEDBYTHE BORROWERAND ISNOT VERIFIED. BORROWERS REPRESENTAND WARRANT THAT INFORMATION SUPPLIED IS ACCURATE. Total Debt <2) Revenue <2) Pamela Fasse Compl eted Projects Average Project ° II '-----1 -----'11 CONTAINED THEREIN IS HELPFUL,WE DO NOT USE IT AS THE SOLE BASISFOR A FUNDING DECISION. THECOMPANYPLAYED NO ROLE IN THE PREPARATIONOF ANY OF THE VALUATION SOURCES OR ANY OTHERMATERIALS PROVIDED BYTHE BORROWER.WH ILE WE BELIEVE THE DATA FASSE CONSTRUCTION &FINANCIAL DATAPROJECTS I REVENUE DEVELOPMENT INC. DATE OF FORMATION * 02/27/2012 Gross Margin% <2) IPRINCIPALGROUNDFLOOR HISTORY *HISTORICAL AVERAGES FOCUS New ConstructionLoans Funded <2)Loans Repaid <2)PerYear <2)Revenue <2) 12 II $323.8K On TimeAverage Project Average Total Repayment <2)Time <2)Project Costs <2) 10.0% '-l12_m_o_n_th_s__,ll$265K Reportingperiod:three years ending 2020 0.0% Reportingperiod:2020 Reportingdate:12/31/20 PROJECT SPECIFIC RISK FACTORS o The Borrower was advanced the money it needs to begin constructi on of this property on January 25,2021by Groundfloor Finance Inc.("Groundfloor," "we," "us'; or "our") or a wholly-owned subsidiary of Groundfloor. The Borrower will has begun construction of the property. If this offering is fully subscribed,Groundfloor will continue to administer and service the loan as further described in the Offering Circular. o The construction of the property may be extensive,and therefore subject to delays and other unexpected issues. o The construction willrequire permitting, and permits may not be obtained on time or may be denied. o There will be multiple l oans on this project, each representing subsequent draws. The loans will range from $80,000 to $90,000. The Financial Overview box represents the aggregate amount of all loans to be secured by this property,giving a complete financial picture of the project. o There is no existing structure on this property,or if there is,it will be demolished,and a new structure built in its place. o The event of default on one Groundfloor note secured by this property will trigger default on all Groundfloor notes secured by this property. All LRO holders investingin LROs corresponding to notes secured by this property share the same priority in any recovery and recovered proceeds will be distributed on a pro-rata basis. o This loan represents the second draw for the construction project and is secured by an individual note. o Each draw on this project is structured as an individual loan.We will fund each draw from our own capital or credit facilities as and when requested by the Borrower,provided conditi ons for each draw are met as described in our Offering Circular.Once a draw has been approved and funded,we will then sell the corresponding seri es of LROs on our platform,each of which will be due 12 months from the time such seri es of LRO is deemed issued,as described in our Offering depending on the progress of constructi on. o The Borrower has not completed or sold any projects in the past year.As such,the Borrower's average revenue,costs,and margins cannot be calculated. o Please consult the Offering Circul ar for further discussion of general risk factors. CLOSING CONDITIONS o Loan is conditi oned upon a clean title search and valid title insurance at the time of close. DEVElOPER FEES o GROUNDFLOOR generally charges borrowers between 2% and 6% of the principal amount of the l oan for our services. o GROUNDFLOOR does not take a 'spread' on any part of the interest payments. o Developers may capitalize the cost of closing into the principal amount of their request.These closing costs typically range from $500 to $1500. o Unless otherwise limited by applicable l aw,GROUNDFLOOR will charge a penalty of 2% for any extension made to the borrower. See GROUNDFLOOR 'Fees and Expenses' in the OfferingCircular SEC FiliNG INFORMATION o The series of LROs corresponding to this Project are offered pursuant to Post Qualification Amendment No.79 to the Offering Circul ar dated December 29,2017 (each,as amended and supplemented from time to time),including the documents incorporated by reference therein.You may access and review these documents on the Internal Filings Directory located on our Platform. ,I' XCROF T v WH IAddress: 2541TONBO TRAIL #2,WILMINGTON,NC 28409 :NT LEY \RDENSThe Borrower intends to use the l oan proceeds to complete a new construction.Upon completi on,the Borrower intends to sell the property to repay the Groundfloor loan. Seafood9 Click here to view the LRO Agreement INVEST NOW As Complete (ARV) $370,000 Broker's Price Opinion Borrower Provided Appraisal Borrower Provided Comps After RepairValue (ARV) <2)$370,000 $22,930 TotalCosts$347,070 0% Skin-in-theFirst Lien LoanCushion <2) Game <2) Purchase Price$90,000Loan To ARV69.5% Loan To Total <2) (2} <2) VALUATION REPORTS The followingfactors determine in part how the loan was graded: (in descending order of importance) Loan To ARV Score <2)10 Quality of ValuationReport4 Skin-in-the-Game <2)10 location8 Borrower Experience5 Borrower Commitment <2)1 GRADE FACTORS Rate Loan ToARV Loan Amount Investors •II -!s = Purpose Loan Position TotalLoan Amount Repayment Terms Fasse Constructi on &L Fi_rs_t_L_ie_n _,ll $85,535 DeveloP-ment Inc. Pamela Fasse - principal Click here to view the LRO Agreement INVEST NOW New Construction Balloon payment-principaland interest returned on repayment/ due at maturity. u w

 

 PS-969 

 

 

 

 

II II BORROWER I 1 Project Cost Address: 2541TONBO TRAIL #3,WILMINGTON,NC 28409 WHI' View larger map X C R 0 F T Seafood 9 ., l> S T 0 N E B R I0 G E ? c;,. erw\\\e\..o \ Map d-ata ®2021 ' Terms of Use . Report a map error PROPERTY PHOTOS Total Debt ® Revenue ® Pamela Fasse Average Project Compl eted Projects II 1 2 $323.8K CONTAINED THEREIN IS HELPFUL,WE DONOT USEIT AS THE SOLE BASIS FOR A FUNDING DECISION. THECOMPANYPLAYED NO ROLE IN THE PREPARATIONOF ANY OFTHE VALUAT ION SOURCES ORANY OTHERMATERIALS PROVIDED BYTHE BORROWER.WH ILE WE BELIEVE THE DATA BORROWER SUMMARY UNLESSNOTEDWITHA * 'INFORMATIONBELOW IS SUPPLIED BY THE BORROWERAND ISNOT VERIFIED. BORROWERS REPRESENTAND WARRANT THAT INFORMATION SUPPLIED IS ACCURATE. FASSE CONSTRUCTION &FINANCIA DATAPROJECTS I REVENUE DEVELOPMENT INC. DATE OF FORMATION * 02/27/2012 Gross Margin% ® IPRINCIPALGROUNDFLOOR HISTORY *HISTORICAL AVERAGES FOCUS New ConstructionLoans Funded Q)Loans Repaid (!)PerYear (!)Revenue (!) L,l_ ----'11°II On TimeAverage Project Average Total Repayment ®Time ®Project Costs ® 10.0% _'-l _ 1 2 mon_th_s ,ll$265K Reportingperiod:three years ending 2020 0.0% Reportingperiod:2020 Reportingdate:12/31/20 MISCELLANEOUS PROJECT SPECIFIC RISK FACTORS • The Borrower was advanced the money it needs to begin construction of this property on January 25,2021by Groundfloor Finance Inc.("Groundfloor;·"we';"us'; or "our") or a wholly-owned subsidiary of Groundfloor. The Borrower will has begun construction of the property. If this offering is fully subscribed,Groundfloor will continue to administer and service the loan as further described in the Offering Circular. • The construction of the property may be extensive,and therefore subject to delays and other unexpected issues. • The construction willrequire permitting, and permits may not be obtained on time or may be denied. • There will be multiple l oans on this project, each representing subsequent draws. The loans will range from $80,000 to $90,000. The Financial Overview box represents the aggregate amount of all loans to be secured by this property,giving a complete financial picture of the project. • There is no existing structure on this property,or if there is,it will be demolished,and a new structure built in its pl ace. • The event of default on one Groundfloor note secured by this property will trigger default on all Groundfloor notes secured by this property. All LRO holders investing in LROs corresponding to notes secured by this property share the same priority in any recovery and recovered proceeds will be distributed on a pro-rata basis. • This loan represents the third draw for the construction project and is secured by an individual note. • Each draw on this project is structured as an individual loan.We will fund each draw from our own capital or credit facilities as and when requested by the Borrower,provided conditions for each draw are met as described in our Offering Circular.Once a draw has been approved and funded,we will then sellthe corresponding seri es of LROs on our platform,each of which will be due 12 months from the time such seri es of LRO is deemed issued,as described in our Offering Circular.Subsequent draws are expected to be requested every two months from the date we advanced the first draw,but may be requested sooner,or later, depending on the progress of construction. • The Borrower has not compl eted or sold any projects in the past year.As such,the Borrower's average revenue,costs,and margins cannot be calculated. • Please consult the Off eringCircular for further discussion of general risk factors. CLOSING CONOITIONS • Loan is conditioned upon a clean title search and valid title insurance at the time of close. DEVElOPER FEES • GROUNDFLOOR generally charges borrowers between 2% and 6% of the principal amount of the l oan for our services. • GROUNDFLOOR does not take a 'spread' on any part of the interest payments. • Developers may capitalize the cost of closing into the principal amount of their request.These closing costs typically range from $500 to $1500. • Unless otherwise limited by applicable l aw,GROUNDFLOOR will charge a penalty of 2% for any extension made to the borrower. See GROUNDFLOOR 'Fees and Expenses' in the Offering Circular SEC FiliNG INFORMATION • The seri es of ROs corresponding to this Project are offered pursuant to Post Qualification Amendment No.79 to the Offering Circular dated December 29,2017 (each,as amended and supplemented from time to time),including the documents incorporated by reference therein.You may access and review these documents on the Internal Filings Directory located on our Platform. PROPERTY DESCRIPTION ,I' :NT LEY lRDENSThe Borrower intends to use the l oan proceeds to complete a new construction.Upon completion,the f} '0Borrower intends to sellthe property to repay the Groundfloor loan. 0 HERRINr. Poe Click here to view the LRO Agreement INVEST NOW As Complete (ARV) $370,000 Broker's Price Opinion Borrower Provided Appraisal Borrower Provided Comps FINANCIAL OVERVIEW After Repair Value (ARV) (!)$370,000 $22,930 TotalCosts$347,070 0% ----Skin-in-theFirst lien Loan Cushion (!) Game (!) Purchase Price$90,000Loan ToARV69.5% Purchase Date01/25/2021Loan To Total73.5% (!) (!) {2) VALUATION REPORTS GRADE FACTORS The followingfactors determine in part how the loan was graded: (in descending order of importance) LoanToARVScore (!)10 Quality of ValuationReport4 Skin-in-the-Game (!)10 location8 Borrower Experiences Borrower Commitment (!)1 • Rate loan ToARV loan AmountInvestors Purpose loan Position Total oan Amount Repayment Terms Fasse Construction &L Fi_rs_t_L_ie_n _JII $85,535 DeveloP-ment Inc. Pamel a Fasse-principal Cli ck here to vi ew the LRO Agreement INVEST NOW New Construction Balloon payment-principaland interest returned on repayment/ due at maturity.

 

 PS-970 

 

 

 

 

I. --BORROWER FINANCIAL OVERVIEW Cushion CD Skin-in-the First Lien Loan Loan To Total PROPERTY DESCRIPTION View larger map X C R 0 F T l RD E NS The Borrower intends to use the loan proceeds to complete a new construction.Upon completion,the f' t!l 0 09 HERRIN r. P<i0c:e Click here to view the LRO Agreement PROPERTY PHOTOS MISCELLANEOUS Borrower,provided conditions for each draw are met as described in our Offering Circular.Once a draw has been approved and funded, we will then sell the Circular.Subsequent draws are expected to be requested every two months from the date we advanced the first draw,but may be requested sooner,or later, BORROWER SUMMARY UNLESSNOTEDWITHA * ,INFORMATIONBELOW ISSUPPLIEDBY THE BORROWERAND ISNOT VERIFIED. BORROWERS REPRESENTAND WARRANT THAT INFORMATION SUPPLIED IS ACCURATE. Pamela Fasse Completed ProjectsAverage Project II 1 2 $323.8K 1 0.0% _Ll _12_m_o_n_th_s__,ll $265K CONTAINED THEREIN IS HELPFUL,WE DONOT USE IT AS THE SOLE BASISFOR A FUNDING DECISION. THE COMPANYPLAYED NO ROLE IN THE PREPARATIONOF ANY OF THE VALUATIONSOURCESOR ANY OTHER MATERIALS PROVIDED BYTHE BORROWER.WHILE WE BELIEVE THE DATA FASSE CONSTRUCTION &FINANCI AL DATA PROJECTS I REVENUE DEVELOPMENT INC. DATE OF FORMATION * 02/27/2012 Gross Margin% CD IPRINCIPALGROUNDFLOOR HISTORY *HISTORICAL AVERAGES FOCUS New Construction Loans Funded CDLoans Repaid CDPerYear CDRevenue CD Ll-----'11° II On TimeAverage Project Average Total Repayment CDTime CDProject Costs CD Reportingperiod:three years ending 2020 0.0% Reportingperiod:2020 Reportingdate:12/31/20 PROJECT SPECIFIC RISK FACTORS o The Borrower was advanced the money it needs to begin construction of this property on January 25,2021by Groundfloor Finance Inc.("Groundfloor ·"we; "us; or "our") or a wholly-owned subsidiary of Groundfloor. The Borrower will has begun construction of the property. If this offering is fully subscribed,Groundfloor will continue to administer and service the loan as further described in the Offering Circular. • The construction of the property may be extensive,and therefore subject to delays and other unexpected issues. • The construction willrequire permitting, and permits may not be obtained on time or may be denied. • There will be multiple loans on this project, each representing subsequent draws. The loans will range from $80,000 to $90,000. The Financial Overview box represents the aggregate amount of all loans to be secured by this property,giving a complete financial picture of the project. o There is no existing structure on this property, or if there is,it will be demolished,and a new structure built in its place. o The event of default on one Groundfloor note secured by this property will trigger default on all Groundfloor notes secured by this property. All LRO holders investing in LROs corresponding to notes secured by this property share the same priority in any recovery and recovered proceeds will be distributed on a pro-rata basis. • This loan represents the first draw for the construction project and is secured by an individual note. • Each draw on this project is structured as an individual loan.We will fund each draw from our own capital or credit facilities as and when requested by the corresponding series of LROs on our platform, each of which will be due 12 months from the time such series of LRO is deemed issued,as described in our Offering depending on the progress of construction. o The Borrower has not completed or sold any projects in the past year.As such,the Borrower's average revenue,costs, and margins cannot be calculated. o Please consult the OfferingCircular for further discussion of general risk factors. CLOSING CONDITIONS • Loan is conditioned upon a clean title search and valid title insurance at the time of close. DEVELOPER FEES o GROUNDFLOOR generally charges borrowers between 2% and 6% of the principal amount of the loan for our services. o GROUNDFLOOR does not take a 'spread' on any part of the interest payments. o Developers may capitalize the cost of closing into the principal amount of their request.These closing costs typically range from $500 to $1500. o Unless otherwise limited by applicable law,GROUNDFLOOR will charge a penalty of 2% for any extension made to the borrower. See GROUNDFLOOR 'Fees and Expenses' in the OfferingCircular SEC FILING INFORMATOI N o The series of LROs corresponding to this Project are offered pursuant to Post Qualification Amendment No. 79 to the OfferingCircular dated December 29,2017 (each,as amended and supplemented from time to time),including the documents incorporated by reference therein. You may access and review these documents on the Internal Filings Directory located on our Platform. .I' v WHI Address: 2541TONBO TRAIL #1,WILMINGTON,NC 28409 :NT L E V Borrower intends to sellthe property to repay the Groundfloor loan. Seafood T>< 0c S T 0 N E 8 RIDGE1 Gree,.,,j\\\0\.o\ '"o Map data ®2021 Terms of Use . Report a map error INVEST NOW As Complete (ARV) $370,000 Broker's Price Opinion Borrower Provided Appraisal Borrower Provided Comps After RepairValue (ARV) CD$370,000 $22,930 TotalProject Costs CD$347,070 0% Game CD Purchase Price $90,000Loan To ARV 69.5% Purchase Date01/25/2021 Project Cost CD 73.5% CD CD VALUATION REPORTS The followingfactors determine in part how the loan was graded: (in descending order of importance) Loan To ARV Score CD10 Quality of ValuationReport4 Skin-in-the-Game CD 10 location8 Borrower Experience5 Borrower Commi tment CD1 GRADE FACTORS Rate Projected Term LoanToARV Loan AmountInvestors •II PurposeLoan Position TotalLoan Amount Repayment Terms Fasse Construction &'---F-i_rs_t_L_ie_n _,ll $86,000 DeveloP-ment Inc. Pamela Fasse-principal Click here to view the LRO Agreement INVEST NOW New Construction Balloon payment - principaland interest returned on repayment/ due at maturity. L

 

 PS-971 

 

 

 

 

6 250 Dasez Creative LLC ------------------------------------------------------------(i#j1ItI [§JIJJlii!l:Ja[#J el!l'§Ji:OIA:J el ¢fltD $135,000 Project Cost (!) PI View larger map \ Address: 252 RODILIN DRIVE.PITTSBURGH.PA 15235 Borrower intends to sell the property to repay the Groundtloor loan. 3nsportat1on -... Click here to view the LRO Agreement Value of Properties (!) Total Debt (!) Completed Projects (!) Revenue (!) GROUNDFLOOR HISTORY * HISTORICAL AVERAGES ' Jerome Scott Completed Projects Average Project 1'------1_11 II II ° o $O CONTAINED THERE: IN IS HE:LPF-UWl E 00 NOT USE IT AS THE: SOLE BASS FORA f-UNDING DECISION. TI-lE C.OMPANYPLAYEDNO ROLE IN THE PRE:PARAT ON Of-ANY OF-THE VALUATION SOURC.ESORANYOTHE:RMATERIALS PROVIDED BY THE BORROWE:R. WH LE WE BELIEVE THE DATA DASEZ CREATIVE LLCFINANCIAL DATAPROJECTS/ REVENUE Reportingdate: 12 Reporting DATE OF FORMATION * 04/29/2013 Unsold Inventory (!) Aged Inventory (!) Gross Margin% (!) PRINCIPAL FOCUS Single FamilyLoans Funded (!) Loans Repaid (!) Per Year (!) Revenue (!) On Time Average ProjectAverage Total Repayment (!) Time (!) Project Costs (!) 10.0%1'-----N-_AIII$0 Reporfng period:three vears ending 2020 0.0% period:2020 '31/20 MISCELLANEOUS PROJECT SPECIFIC RISK FACTORS • The Borrower was advanced the money it needed to purchase this property on March 1,2021by Groundtloor Finance Inc.("Groundfloor · " we:·" us:· or "our") or a wholly-owned subsidiary of Groundfloor. The Borrower is now in possession of the property. If this offering is fully subscribed,Groundtloor will continue to administer and service the loan as further described in the Offering Circular. • The renovation of the property may be extensive,and therefore subject to delays and other unexpected issues. • The renovation will require permitting,and permits may not be obtained on time or may be denied. • The Borrower has not completed or sold any projects in the past year. As such, the Borrower's average revenue,costs,and margins cannot be calcuIated. • The Principal has not yet completed or sold any projects.As such, the Principal's average revenue,costs,and margins cannot be calculated. • Please consult the Offering Circular for further discussion of general risk factors. CLOSING CONDITIONS • Loan is conditioned upon a clean title search and valid title insurance at the time of close. DEVELOPER FEES • GROUNDFLOOR generally charges borrowers between 2% and 6% of the principal amount of the loan for our services. • GROUNDFLOOR does not take a 'spread' on any part of the interest payments. • Developers may capitalize the cost of closing into the principal amount of their request.These closing costs typically range from $500 to $1500. • Unless otherwise limited by applicable law,GROUNDFLOOR will charge a penalty of 2% for any extension made to the borrower. See GROUNDFLOOR 'Fees and Expenses' in the Offering Circular SEC FILING INFORMATION • The series of LROs corresponding to this Project are offered pursuant to Post Qualification Amendment No. 79 to the Offering Circular dated December 29,2017 (each,as amended and supplemented from time to time),including the documents incorporated by reference therein. You may access and review these documents on the Internal Filings Directory located on our Platform. PROPERTY DESCRIPTION : cll!_l nm.:> 8 «;! mia DepartmentMike' The Borrower intends to use the loan proceeds to purchase and renovate the property.Upon completion, the Long John Sliver's Dunkm' INVEST NOW As Complete (ARV)[ Broker's Price Opinion Borrower Provided Appraisal Borrower Provided Camps VALUATION REPORTS The following factors determine in part how the loan was graded: (in descending order of importance) Loan To ARV Score (!) 10 Quality of Valuation Report4 Skin-in-the-Game (!) 10 Location8 Borrower Experience5 Borrower Commitment (!)1 GRADE FACTORS FINANCIAL OVERVIEW After Re$135,000 Total Project Costs (!) $107,400 0% ----Skin-in-the First Lien LoanCushion (!) Game (!) Purchase Price (!} $67,400loanToARV (!} 63.9% Purchase Date 03/01/2021loan To Total 79.6% RateLoanToARV Loan Amount Investors PurposeLoan Position Total Loan Amount Repayment Terms BORROWER '---F-ir_s_t_u_e_n _JII $B , _. . Jerome Scott-principal Click here to view the LRO Agreement INVEST NOW r---=-8-al.:.._lo_o_n_p_a_y_m_e_n_t--pr-i-nc-i-pa_l_a_n_d-in_t_e-re_s ,t returned on repayment I due at maturity. Purchase& Renovation

 

 PS-972 

 

 

 

 

Golden Rule Management LLC L FINANCIAL OVERVIEW - Borrower Experience 5 Project Cost PROPERTY DESCRIPTION The Borrower intends to use the loan proceeds to renovate the property. Upon completion,the Borrower intends to sell the property to repay the Groundfloor loan. Harveys Supern Edgewood Ave W ••'ll lo<f-'9' ".. Mr.Shark Crab - IMI• ! Go.. gle 1l "-IS Map data ®2021 Terms of Use R eport a map error MISCELLANEOUS BORROWER SUMMARY * 'INFORMATIONBELOW IS SUPPLIED BY THE BORROWERAND ISNOT VERIFIED. BORROWERS REPRESENTAND WARRANT THAT INFORMATION SUPPLIED IS ACCURATE. Revenue ® Total Debt (2) GROUNDFLOOR HISTORY * HISTORICAL AVERAGES Titus Hill Completed Projects Average Project ° o '-----1 ------'11 II $O II CONTAINEDTHEREIN IS HELPFUL,WE DO NOT USE IT AS THE SOLE BASISFOR A FUNDING DECISION. THECOMPANYPLAYED NO ROLE IN THE PREPARATIONOF ANY OF THE VALUATION SOURCESORANYOTHER MATERIALS PROVIDED BYTHE BORROWER.WHILE WE BELIEVE THE DATA GOLDEN RULE MANAGEMENT LLCFINANCIAL DATA PROJECTS /REVENUE DATE OF FORMATION * 09/07/2016 Gross Margin% ® IPRINCIPAL FOCUS Buy& HoldLoans Funded ® Loans Repaid ® PerYear ® Revenue (2) 1 On TimeAverage Project Average Total Repayment ® Time (2)Project Costs (2) 10.0% L lo months-----'II$0 Reporting period:three years ending 2020 0.0% Reporting period:2020 Reportingdate:12/31/20 UNLESSNOTED WITHA PROJECT SPECIFIC RISK FACTORS • The Borrower was advanced the money it needed to begin renovation of this property on February 15,2021by Groundfloor Finance Inc.("Groundfloor;·"we;·"us;· or "our") or a wholly-owned subsidiary of Groundfloor. The Borrower has now begun renovation of the property.If this offering is fully subscribed,Groundfloorwill continue to administer and service the loan as further described in the OfferingCircular. • The Borrower is using $0 of the loan proceeds to pay off an existing loan that was used to acquire the property.Groundfloor willassume the first lien position. The rest of the loan proceeds will be put towards the renovation of the property,much like an acquisition and renovation loan. • The renovation of the property may be extensive,and therefore subject to delays and other unexpected issues. • The renovation will require permitting,and permits may not be obtained on time or may be denied. • The Borrower has not completed or sold any projects in the past year.As such,the Borrower's average revenue,costs,and margins cannot be calculated. • The Principal has not yet completed or sold any projects.As such,the Principal's average revenue,costs,and margins cannot be calculated. • Please consult the Offering Circular for further discussion of general risk factors. CLOSING CONDITIONS • Loan is conditioned upon a clean title search and valid title insurance at the time of close. DEVElOPER FEES • GROUNDFLOOR generally charges borrowers between 2% and 6% of the principal amount of the loan for our services. • GROUNDFLOOR does not take a 'spread' on any part of the interest payments. • Developers may capitalize the cost of closing into the principal amount of their request.These closing costs typically range from $500 to $1500. • Unless otherwise limited by applicable law,GROUNDFLOOR will charge a penalty of 2% for any extension made to the borrower. See GROUNDFLOOR 'Fees and Expenses' in the OfferingCircular SEC FiliNG INFORMATION • The series of LROs corresponding to this Project are offered pursuant to Post Qualification Amendment No.79 to the OfferingCircular dated December 29,2017 (each,as amended and supplemented from time to time),including the documents incorporated by reference therein. You may access and review these documents on the Internal Filings Directory located on our Platform. Address: 2645 EDGEWOOD AVENUE WEST, JACKSONVILLE,FL 32209 ' Click here to view the LRO Agreement INVEST NOW As Complete (ARV) $175,000 Broker's Price Opinion Borrower Provided Appraisal Borrower Provided Comps $175,000 Total· Costs$124,230 $25,000 0% Skin-in-theFirst lien Loan Cushion (2) Game (2) Purchase Price $57,250 Loan To ARV 56.7% Purchase Date01/01/2021Loan To Total79.4% (2) {2) (2) VALUATION REPORTS The followingfactors determine in part how the loan was graded: (in descending order of importance) Loan To ARV Score (2)10 Quality of Valuation Report4 Skin-in-the-Game (2)10 location 8 Borrower Commitment (2)1 GRADE FACTORS Rate Projected Termloan ToARVloan AmountInvestors Purposeloan PositionTotal loan Amount Repayment Terms BORROWER F_i_rs_t_L_ie_n ,l I$99,230 ;.=B:..:a"-11oc..:o.::n.::..:..p...::.:c..a:y:m. :.::.._en__t -p_ -r inc_i_p_al_a_n_d_i_nte_r_e_s-t-, . . returned on repayment/ due at maturity. Titus Hill-principal Click here to view the LRO Agreement INVEST NOW Refinance Rehab

 

 PS-973 

 

 

 

 

Purpose Loan Position Total Loan Amount Repayment Terms 00,000 _ . . I Marlon Luis-principal ----------------------------------------------------------------------------------------------------------------------I I Project Cost (!) Dollar Tree 9 Go gle, Value of Properties (!) TotalDebt (!) Completed Projects (!) Revenue (!) GROUNDFLOOR HISTORY * HISTORICAL AVERAGES Completed Projects Average Project IL... 5 JII 3 II CONTAINED THEREIN IS HELPFUL,WE DO NOT USE IT AS THE SOLE BASISFORA FUNDING DECISION. THE C.OMPANYPLAYE-DNOROLE IN THE PREPARATION OF-ANY OF THE:VALUATIONSOURCESORANYOTHERMAHRIALSPROVIDEDBY THE BORROWER. WHILE WE BELIEVE THE DATA * 'INFORMATION BELOW IS SUPPLIEDBY THE BORROWER AND ISNOT VERIFIED. BORROWERS REPRESENT ANDWARRANTTHATINFORMATION SUPPLIED IS ACCURATE. MOM HOUSE FLIPPING LLCFINANCIAL DATAPROJECTSI REVENUE DATE OF FORMATION * 05/21/2019 I Gross Margin % (!) PRINCIPAL Marlon Luis FOCUS Fix&FiipLoans Funded (!) Loans Repaid (!) PerYear (!) Revenue (!) 1II$162.5K On Time Average ProjectAverage Total Repayment (!) Time (!) Project Costs (!) 133.0% IL 1_2_m_o_nt_hs_ JII$140K ,ending 2020 27.0% $339.9K $0 Reporfng per od 2020 Report''1g date:2 31/20 UNLESSNOTED WITH A BORROWER SUMMARY PROJECT SPECIFIC RISK FACTORS • The Borrower was advanced the money it needed to purchase this property on February 11,2021by Groundfloor Finance Inc.("Groundfloor;·"we," "us," or "our") or a wholly-owned subsidiary of Groundfloor.The Borrower is now in possession of the property.If this offering is fully subscribed,Groundfloor will continue to administer and service the loan as further described in the Offering Circular. • The renovation of the property may be extensive,and therefore subject to delays and other unexpected issues. • The renovation willrequire permitting,and permits may not be obtained on time or may be denied. • The borrower has had late repayments, but has repaid all loans in full,with all interest and fees due. • Please consult the Offering Circular for further discussion of general risk factors. CLOSING CONDITIONS • Loan is conditioned upon a clean title search and valid title insurance at the time of close. DEVELOPER FEES • GROUNDFLOOR generally charges borrowers between 2% and 6% of the principal amount of the loan for our services. • GROUNDFLOOR does not take a 'spread' on any part of the interest payments. • Developers may capitalize the cost of closing into the principalamount of their request. These closing costs typically range from $500 to $1500. • Unless otherwise limited by applicable law,GROUNDFLOOR will charge a penalty of 2% for any extension made to the borrower.See GROUNDFLOOR 'Fees and Expenses' in the Offering Circular SEC FILING INFORMATION • The series of LROs corresponding to this Project are offered pursuant to Post Qualification Amendment No.79 to the Offering Circular dated December 29,2017 (each,as amended and supplemented from time to time), including the documents incorporated by reference therein.You may access and review these documents on the InternalFilings Directory located on our Platform. View larger mapAddress: 7520 JOHN F KENNEDY DRIVE EAST.JACKSONVILLE.FL 32219 Bluorbitd RdThe Borrower intends to use the loan proceeds to purchase and renovate the property.Upon completion, the Borrower intends to sell the property to repay the Groundfloor loan. \ \ :ailcar Services Map data @2021 Terms of Use Report amap error Click here to view the LRO Agreement INVEST NOW As Complete (ARV) $135,000 Broker's Price Opinion Borrower Provided Appraisal Borrower Provided Camps After Value (ARV) (!) $135,000 TotalCosts (!) $100,000 0% ------------------------------Skin-in-the First Lien LoanCushion (!) Game (!) Purchase Price (!) $89,500 Loan ToARV (!}74.1% Purchase Date02/11/2021Loan To Totall 1oo.o% 1 VAlUATION REPORTS The following factors determine in part how the loan was graded: (in descendingorder of importance) LoanToARVScore (!) 10 Quality of Valuation Report 4 Skin-in-the-Game (!) 0 10 Location8 Borrower Experience5 Borrower Commitment (!)1 GRADE FACTORS RateLoanToARV Loan Amount Investors BORROWER MOM House FliQQing LLC c__ _ F_ir_s_tL_i_e_n _J] ] $1 Click here to view the LRO Agreement INVEST NOW .---:-8-a.:....llo_o_n_p_a_y_m_e_n_t--p-ir-nc_i_p-al_a_n_d-in_t_e-re-s---.t returned on repayment due at maturity. Purchase & Renovation

 

 PS-974 

 

 

 

 

., -... L Fi_rs_t_Li_e_n _JII $100,000 BORROWER Biodun Bankole - principal I - Skin-in-the-Game CD 10 Project Cost The Borrower intends to use the loan proceeds to complete a new construction.Upon completion,the "'1ol ., femclift Rd N E 0"' Map data ®2021 Goog!e Terms of Use R eport .a map error Click here to view the LRO Agreement PROPERTY PHOTOS •: - . .. • 1._ .... . ,, • r r ... 1 1 I" · 0 o• - • ('C Flo .. .-· rn Mal• Ceili nw 1ah Floo J ll "r 1-- ,.JAil GuJiNI a.u llh au-tn a.t .a"O C Total Debt CD Revenue ® Value of Properties (2) GROUNDFLOOR HISTORY * HISTORICAL AVERAGES Biodun Bankole Completed Projects Average Project II 3 2 $557K CONTAINEDTHEREIN IS HELPFUL,WE DO NOT USE IT AS THE SOLE BASISFOR A FUNDING DECISION. THECOMPANYPLAYED NO ROLE IN THE PREPARATIONOF ANY OF THE VALUATION SOURCESOR ANY OTHER MATERIALS PROVIDED BYTHE BORROWER.WHILE WE BELIEVE THE DATA BORROWER SUMMARY UNLESSNOTEDWITHA * 'INFORMATIONBELOW IS SUPPLIED BY THE BORROWERAND ISNOT VERFI IED. BORROWERS REPRESENTAND WARRANT THAT INFORMATION SUPPLIED IS ACCURATE. PRIMALOGIST LLC FINANCI AL DATA PROJECTS / REVENUE DATE OF FORMATION * 04/27/2016 Gross Margin% CD IPRINCIPAL FOCUS Fix & Fiip Loans Funded CDLoans Repaid ® Per Year (2)Revenue CD L,l_ -----'11 °II On TimeAverage Project Average Total Repayment CDTime ® Project Costs CD 10.0% _'-l _ 1 2 mon_th_s ,ll$436.7K Reportingperiod:three years ending 2020 20.0% $4.4M $2.6M Reportingperiod:2020 Reportingdate:12/31/20 MSI CELLANEOUS PROJECT SPECIFIC RISK FACTORS o The Borrower was advanced the money it needs to begin construction of this property on February 8, 2021by Groundfloor Finance Inc.("Groundfloor;'"we;'"us,· or "our") or a wholly-owned subsidiary of Groundfloor. The Borrower has begun construction of the property. If this offering is fully subscribed,Groundfloor will continue to administer and service the loan as further described in the OfferingCircular. o The construction of the property may be extensive,and therefore subject to delays and other unexpected issues. o The construction willrequire permitting, and permits may not be obtained on time or may be denied. o There will be multiple loans on this project, each representing subsequent draws. The loans will range from $100,000 to $300,000.The Financial Overview box represents the aggregate amount of all loans to be secured by this property,giving a complete financial picture of the project. o There is no existing structure on this property,or if there is,it will be demolished,and a new structure built in its place. o The event of default on one Groundfloor note secured by this property will trigger default on all Groundfloor notes secured by this property. All LRO holders investing in LROs corresponding to notes secured by this property share the same priority in any recovery and recovered proceeds will be distributed on a pro-rata basis. o This loan represents the fifth draw for the construction project and is secured by an individual note. o Each draw on this project is structured as an individual loan.We will fund each draw from our own capital or credit facilities as and when requested by the Borrower,provided conditions for each draw are met as described in our Offering Circular.Once a draw has been approved and funded,we will then sell the corresponding series of LROs on our platform,each of which will be due 12 months from the time such series of LRO is deemed issued,as described in our Offering Circular.Subsequent draws are expected to be requested every two months from the date we advanced the first draw,but may be requested sooner,or later, depending on the progress of construction. o Please consult the OfferingCircular for further discussion of general risk factors. CLOSING CONOITIONS o Loan is conditioned upon a clean title search and valid title insurance at the time of close. DEVELOPER FEES o GROUNDFLOOR generally charges borrowers between 2% and 6% of the principal amount of the loan for our services. o GROUNDFLOOR does not take a "spread' on any part of the interest payments. o Developers may capitalize the cost of closing into the principal amount of their request.These closing costs typically range from $500 to $1500. o Unless otherwise limited by applicable law,GROUNDFLOOR will charge a penalty of 2% for any extension made to the borrower. See GROUNDFLOOR 'Fees and Expenses' in the OfferingCircular SEC FILING INFORMATION o The series of LROs corresponding to this Project are offered pursuant to Post Qualification Amendment No.79 to the OfferingCircular dated December 29,2017 (each,as amended and supplemented from time to time),including the documents incorporated by reference therein.You may access and review these documents on the Internal Filings Directory located on our Platform. I T E r -T T f r il • J ll J ' · . 1 :I 1111 'I l. 1,1 Ill! u r T .;ill l i!iII Ill J I I DO · 1 m .111 I lI Ill ttl !Ill l!HIII; 1 ID ·..? PROPERTY DESCRIPTION Address: 3458 ROCKHAVEN ClRCLE NORTHEAST #5,ATLANTA,GA 30324 'Borrower intends to sellthe property to repay the Groundfloor loan. Go ille<S" INVEST NOW As Complete (ARV) $1,095,000 Broker's Price Opinion Borrower Provided Appraisal Borrower Provided Comps FINANCIAL OVERVIEW After Repair Value (ARV) CD$1,095,000 TotalProject Costs CD$855,790 $85, 600 0% ----Skin-in-theFirst li en oan Cushion CD Game CD Purchase Price$360,000Loan To ARV 70.3% Purchase Date 02/08/2021Loan To Total89.6% CD CD CD VALUATION REPORTS GRADE FACTORS The followingfactors determine in part how the loan was graded: (in descending order of importance) loan To ARV Score CD10 Quality of Valuation Report4 location8 Borrower Experience5 Borrower Commitment CD1 ..----..•Rate loan To ARV loan AmountInvestors ·---···-Purpose loan PositionTotal oan Amount Repayment Terms Primalogist LLC Click here to view the LRO Agreement INVEST NOW Purchase & Renovation Balloon payment - principaland interest returned on repayment/ due at maturity.

 

 PS-975 

 

 

 

 

1 0 210 BORROWER L I 68.5% 01/21/2021 Purchase Date Project Cost View larger map !e e•' Newry,SC 29665 intends to sell the property to repay the Groundfloor loan. so ' ....... f.Jb .... Click here to view the LRO Agreement GROUNDFLOOR HISTORY * HISTORICAL AVERAGES Tyler Butts Completed Projects Average Project _ -------'11 ° II L, l CONTAINEDTHEREIN IS HELPFUL.WE DO NOT USEIT ASTHE SOLE BASISFOR A FUNDING DECISION. THECOMPANYPLAYED NO ROLE IN THE PREPARATIONOF ANYOF THE VALUAT ION SOURCESOR ANY OTHERMATERIALS PROVIDED BYTHE BORROWER.WHILE WE BELIEVE THE DATA *,INFORMATIONBELOW IS SUPPLIED BY THE BORROWERAND ISNOT VERIFIED. BORROWERS REPRESENTAND WARRANT THAT INFORMATION SUPPLIED IS ACCURATE. TJILLC FINANCIAL DATAPROJECTS /REVENUE DATE OF FORMATION * 07/21/2017 Gross Margin% CD IPRINCIPAL FOCUS Buy& Hold Loans Funded CDLoans Repaid CDPerYear CDRevenue CD 12 II$50K On TimeAverage Project Average Total Repayment CDTime CDProject Costs CD 10.0% Ll 6_m_o_nt_h_s ,ll$40K Reportingperiod:three years ending 2020 0.0% Reportingperiod:2020 Reportingdate:12/31/20 UNLESSNOTEDWITHA BORROWER SUMMARY PROJECT SPECIFIC RISK FACTORS • The Borrower was advanced the money it needed to begin renovation of this property on January 25,2021by Groundfloor Finance Inc.("Groundfloor ·"we;'"us;· or "our") or a wholly-owned subsidiary of Groundfloor. The Borrower has now begun renovation of the property.If this offering is fully subscribed,Groundfloor will continue to administer and service the loan as further described in the OfferingCircular. • The renovation of the property may be extensive,and therefore subject to delays and other unexpected issues. • The renovation will require permitting,and permits may not be obtained on time or may be denied. • The Borrower is using$0 of the loan proceeds to pay off an existing loan that was used to acquire the property.Groundfloor willassume the first lien position. The rest of the loan proceeds will be put towards the renovation of the property, much like an acquisition and renovation loan. • The Borrower has not completed or sold any projects in the past year.As such,the Borrower's average revenue,costs, and margins cannot be calculated. • The Borrower's 2020 revenue was derived from rental properties because the Borrower's primary focus in 2020 was buy and hold. The Number of Completed Projects reflects the number of rentalunits owned. The Gross Margin reflects the earnings after the expenses of the rentalbusiness,such as mortgage interest, property taxes,and maintenance,have been deducted from gross revenue. • Please consult the Offering Circular for further discussion of general risk factors. CLOSING CONOITIONS • Loan is conditioned upon a clean title search and valid title insurance at the time of close. DEVELOPER FEES • GROUNDFLOOR generally charges borrowers between 2% and 6% of the principal amount of the loan for our services. • GROUNDFLOOR does not take a 'spread' on any part of the interest payments. • Developers may capitalize the cost of closing into the principal amount of their request.These closing costs typically range from $500 to $1500. • Unless otherwise limited by applicable law,GROUNDFLOOR will charge a penalty of 2% for any extension made to the borrower. See GROUNDFLOOR 'Fees and Expenses' in the Offer ngCircular SEC FLI ING INFORMATION • The series of LROs corresponding to this Project are offered pursuant to Post Qualification Amendment No. 79 to the OfferingCircular dated December 29,2017 (each,as amended and supplemented from time to time),including the documents incorporated by reference therein.You may access and review these documents on the Internal Filings Directory located on our Platform. MISCELLANEOUS PROPERTY PHOTOS Address: 150 RIVER RIDGE ROAD,NEWRY,SC 29665 Q-xeowee sanrng club e<y..rl150 River Ridge Rd,The Borrower intends to use the loan proceeds to renovate the property. Upon completion,the Borrower f>"" 'N e wr y.. 8roa .,1S' Go .gla'fS' s. Map data ®2021 Tetms of Use • Report a map error INVEST NOW PROPERTY DESCRIPTION As Complete (ARV) $145,000 Broker's Price Opinion Borrower Provided Appraisal Borrower Provided Comps FINANCIAL OVERVIEW After Repair Value (ARV) CD$145,000 TotalCosts$144,900 0% ----Skin-in-theFirst lien loanCushion CD Game CD Purchase Price$53,000Loan To ARV69.1% Loan To Total CD CD CD VALUATION REPORTS GRADE FACTORS The followingfactors determine in part how the loan was graded: (in descending order of importance) loan To ARV Score CD10 Quality of Valuation Report 4 Skin-in-the-Game CD10 location8 Borrower Experience5 Borrower Commitment CD1 Rateloan ToARV loan AmountInvestors Purposeloan Position Total oan Amount Repayment Terms F_i_rs_t_L_ie_n JII $ 0 , r -B-'a"l'l-o_o_n_pa_y_m_en--t--p-r-in_c_i_p_la_a_n_d_i_n-et_r_e_s-t-, . . returned on repayment/ due at maturity. TJI LLC Tyler Butts-principal Click here to view the LRO Agreement INVEST NOW Refinance Rehab

 

 PS-976 

 

 

 

 

Projected Term oan ToARV Investors Rate loan Amount BORROWER FINANCIAL OVERVIEW - Skin-in-the-Game (2) 10 I PROPERTY DESCRIPTION Address: 5162 SHIRLEY AVENUE,JACKSONVILLE,FL 32210 Ca1TMI1ct Avo Family Fun Center 9 ' The Borrower intends to use the loan proceeds to purchase and renovate the property. Upon completion,the Lexington Ave em P;slmOf Ave Go .gle a. Palmer Ave Click here to view the LRO Agreement )nVille Map data ®2021 Terms of Use Report a map error MISCELLANEOUS BORROWER SUMMARY *,INFORMATIONBELOW IS SUPPLIED BY THE BORROWER AND ISNOT VERIFIED. BORROWERS REPRESENTAND WARRANT THAT INFORMATION SUPPLIED IS ACCURATE. Total Debt ® Revenue ® GROUNDFLOOR HISTORY * HISTORICAL AVERAGES Kelsey Dempsey Completed Projects Average Project Ll _ ----'II II CONTAINEDTHEREIN IS HELPFUL.WE DO NOT USE IT AS THE SOLE BASISFORA FUNDING DECISION. THECOMPANYPLAYED NO ROLE IN THE PREPARATION OF ANY OF THE VALUATION SOURCESOR ANY OTHER MATERIALS PROVIDED BYTHE BORROWER.WHI LE WE BELIEVE THE DATA BOLOINVESTMENTSLLCFINANCIAL DATA PROJECTS / REVENUE DATE OF FORMATION * 11/06/2020 Gross Margin% ® IPRINCIPAL FOCUS Single FamilyLoans Funded ®Loans Repaid ®PerYear ®Revenue ® 1 02 II$183.1K On TimeAverage ProjectAverage Total Repayment ®Time ®Project Costs ® 10.0% _'-l _ 5_m_o_n_th_s ,ll$170.5K Reportingperiod:three years ending 2020 0.0% Reporting period:2020 Reportingdate:12/31/20 UNLESSNOTED WITHA PROJECT SPECIFIC RISK FACTORS o The Borrower was advanced the money it needed to purchase this property on February 24,2021by Groundfloor Finance Inc.("Groundfloor;'"we;'"us;'or "our") or a wholly-owned subsidiary of Groundfloor. The Borrower is now in possession of the property. If this offering is fully subscribed,Groundfloor willcontinue to administer and service the loan as further described in the OfferingCircular. o The renovation of the property may be extensive,and therefore subject to delays and other unexpected issues. o The renovation will require permitting,and permits may not be obtained on time or may be denied. o The Borrower has not completed or sold any projects in the past year.As such,the Borrower's average revenue,costs,and margins cannot be calculated. o Please consult the OfferingCircular for further discussion of general risk factors. CLOSING CONOITIONS o Loan is conditioned upon a clean title search and valid title insurance at the time of close. DEVELOPER FEES o GROUNDFLOOR generally charges borrowers between 2% and 6% of the principal amount of the loan for our services. o GROUNDFLOOR does not take a 'spread' on any part of the interest payments. o Developers may capitalize the cost of closing into the principal amount of their request.These closing costs typically range from $500 to $1500. o Unless otherwise limited by applicable law,GROUNDFLOOR will charge a penalty of 2% for any extension made to the borrower. See GROUNDFLOOR 'Fees and Expenses' in the OfferingCircular SEC FILING INFORMATION o The series of LROs corresponding to this Project are offered pursuant to Post Qualification Amendment No.79 to the OfferingCircular dated December 29,2017 (each,as amended and supplemented from time to time),including the documents incorporated by reference therein.You may access and review these documents on the Internal Filings Directory located on our Platform. ·• ..:arotnaltii'YO View larger map 811\•orlyCi .tvlngton Ave Borrower intends to sellthe property to repay the Groundfloor loan. Lexni g on AYe LA K ;!S l HealthCARE::: .... INVEST NOW After Value$160,000 TotalCosts$120,000 0%----Skin-in-the-First li en LoanCushion (2) Game ® Purchase Price $90,755Loan ToARV 67.5% Purchase Date02/24/2021 Loan To Total89.7% Project Cost ® {2) (2) , VALUATION REPORTS As Complete (ARV) $160,000 Broker's Price Opinion Borrower Provided Appraisal Borrower Provided Comps The followingfactors determine in part how the loan was graded: (in descending order of importance) Loan To ARV Score (2)10 Quality of ValuationReport 4 location8 Borrower Experience5 Borrower Commitment (2)1 $12,000 GRADE FACTORS Purposeloan PositionTotal oan AmountRepayment Terms Bold Investments LLC '----F_irs_t_L_ie_n _,ll $108,000 Kelsey Dempsey-principal Click here to view the LRO Agreement INVEST NOW Purchase & Renovation Balloon payment - principaland interest returned on repayment!due at maturity.

 

 PS-977 

 

 

 

 

., -... L Fi_rs_t_Li_e_n _JII $110,000 BORROWER Biodun Bankole - principal I - Skin-in-the-Game CD 10 Project Cost The Borrower intends to use the loan proceeds to complete a new construction.Upon completion,the "'1ol ., femclift Rd N E 0"' Map data ®2021 Goog!e Terms of Use R eport .a map error Click here to view the LRO Agreement PROPERTY PHOTOS •: - . .. • 1._ .... . ,, • r r ... 1 I" 1 · 0 o• - • ('C Flo .. .-· rn Mal• Ceili nw 1ah Floo J ll "r 1-- ,.JAil GuJiNI a.u llh au-tn a.t .a"O C Total Debt CD Revenue ® Value of Properties (2) HISTORICAL AVERAGES GROUNDFLOOR HISTORY * Biodun Bankole Completed Projects Average Project II 3 2 $557K CONTAINEDTHEREIN IS HELPFUL,WE DO NOT USE IT AS THE SOLE BASISFOR A FUNDING DECISION. THECOMPANYPLAYED NO ROLE IN THE PREPARATIONOF ANY OF THE VALUATION SOURCESOR ANY OTHER MATERIALS PROVIDED BYTHE BORROWER.WHILE WE BELIEVE THE DATA BORROWER SUMMARY UNLESSNOTEDWITHA * 'INFORMATIONBELOW IS SUPPLIED BY THE BORROWERAND ISNOT VERFI IED. BORROWERS REPRESENTAND WARRANT THAT INFORMATION SUPPLIED IS ACCURATE. PRIMALOGIST LLC FINANCI AL DATA PROJECTS / REVENUE DATE OF FORMATION * 04/27/2016 Gross Margin% CD IPRINCIPAL FOCUS Fix & Fiip Loans Funded CDLoans Repaid ® Per Year (2)Revenue CD L,l_ -----'11 °II On TimeAverage Project Average Total Repayment CDTime ® Project Costs CD 10.0% _'-l _ 1 2 mon_th_s ,ll$436.7K Reportingperiod:three years ending 2020 20.0% $4.4M $2.6M Reportingperiod:2020 Reportingdate:12/31/20 MSI CELLANEOUS PROJECT SPECIFIC RISK FACTORS o The Borrower was advanced the money it needs to begin construction of this property on February 8, 2021by Groundfloor Finance Inc.("Groundfloor;'"we;'"us,· or "our") or a wholly-owned subsidiary of Groundfloor. The Borrower has begun construction of the property. If this offering is fully subscribed,Groundfloor will continue to administer and service the loan as further described in the OfferingCircular. o The construction of the property may be extensive,and therefore subject to delays and other unexpected issues. o The construction willrequire permitting, and permits may not be obtained on time or may be denied. o There will be multiple loans on this project, each representing subsequent draws. The loans will range from $100,000 to $300,000.The Financial Overview box represents the aggregate amount of all loans to be secured by this property,giving a complete financial picture of the project. o There is no existing structure on this property,or if there is,it will be demolished,and a new structure built in its place. o The event of default on one Groundfloor note secured by this property will trigger default on all Groundfloor notes secured by this property. All LRO holders investing in LROs corresponding to notes secured by this property share the same priority in any recovery and recovered proceeds will be distributed on a pro-rata basis. o This loan represents the third draw for the construction project and is secured by an individual note. o Each draw on this project is structured as an individual loan.We will fund each draw from our own capital or credit facilities as and when requested by the Borrower,provided conditions for each draw are met as described in our Offering Circular.Once a draw has been approved and funded,we will then sell the corresponding series of LROs on our platform,each of which will be due 12 months from the time such series of LRO is deemed issued,as described in our Offering Circular.Subsequent draws are expected to be requested every two months from the date we advanced the first draw,but may be requested sooner,or later, depending on the progress of construction. o Please consult the OfferingCircular for further discussion of general risk factors. CLOSING CONOITIONS o Loan is conditioned upon a clean title search and valid title insurance at the time of close. DEVELOPER FEES o GROUNDFLOOR generally charges borrowers between 2% and 6% of the principal amount of the loan for our services. o GROUNDFLOOR does not take a "spread' on any part of the interest payments. o Developers may capitalize the cost of closing into the principal amount of their request.These closing costs typically range from $500 to $1500. o Unless otherwise limited by applicable law,GROUNDFLOOR will charge a penalty of 2% for any extension made to the borrower. See GROUNDFLOOR 'Fees and Expenses' in the OfferingCircular SEC FILING INFORMATION o The series of LROs corresponding to this Project are offered pursuant to Post Qualification Amendment No.79 to the OfferingCircular dated December 29,2017 (each,as amended and supplemented from time to time),including the documents incorporated by reference therein.You may access and review these documents on the Internal Filings Directory located on our Platform. I T E r -T T f r il • J ll J ' · . 1 :I 1111 'I l. 1,1 Ill! u r T .;ill l i!iII Ill J I I DO · 1 m .111 I lI Ill ttl !Ill l!HIII; 1 ID ·..? PROPERTY DESCRIPTION Address: 3458 ROCKHAVEN ClRCLE NORTHEAST #3,ATLANTA,GA 30324 'Borrower intends to sellthe property to repay the Groundfloor loan. Go ille<S" INVEST NOW As Complete (ARV) $1,095,000 Broker's Price Opinion Borrower Provided Appraisal Borrower Provided Comps FINANCIAL OVERVIEW After Repair Value (ARV) CD$1,095,000 TotalProject Costs CD$855,790 $85, 600 0% ----Skin-in-theFirst li en oan Cushion CD Game CD Purchase Price$360,000Loan To ARV 70.3% Purchase Date 02/08/2021Loan To Total89.6% CD CD CD VALUATION REPORTS GRADE FACTORS The followingfactors determine in part how the loan was graded: (in descending order of importance) loan To ARV Score CD10 Quality of Valuation Report4 location8 Borrower Experience5 Borrower Commitment CD1 ..----..•Rate loan To ARV loan AmountInvestors ·---···-Purpose loan PositionTotal oan Amount Repayment Terms Primalogist LLC Click here to view the LRO Agreement INVEST NOW Purchase & Renovation Balloon payment - principaland interest returned on repayment/ due at maturity.

 

 PS-978 

 

 

 

 

loan ToARV Investors Rate loan Amount ..,·... n.. Biodun Bankole - principal FINANCIAL OVERVIEW - Skin in·the Game (!) 10 Project Cost PROPERTY DESCRIPTION The Borrower intends to use the l oan proceeds to complete a new construction.Upon completi on,the "1'l o+. (So. femclift RdNE Go gle Click here to view the LRO Agreement Map data ®2021 Goog!e Terms of Use Report a map error PROPERTY PHOTOS . =-.. • ••' , T ··r r r r T "-'.., II I •0 ·a. .. t'C Flo Ill L_ ..L...L..L......L..L..J.J..O..-......L-t-t....................,.,......_.,_ .............I..I..... ' t Ir-a I·r I II '' II ['""" 1ab Ceili IIIII Mah I II F too ,• Iall(,u;rtl btl 1t1a ..... ,""...,·o c MISCELLANEOUS BORROWER SUMMARY UNLESSNOTEDWITHA ,.,INFORMATIONBELOW IS SUPPLIED BY THE BORROWERAND ISNOT VERIFIED. BORROWERS REPRESENTAND WARRANT THAT INFORMATION SUPPLIED IS ACCURATE. Value of Properties (2)Total Debt (2) Revenue (2) HISTORICAL AVERAGES GROUNDFLOOR HISTORY * Bi odun Bankol e Compl eted Projects Average Project On Time Average Project Average Total CONTAINEDTHEREIN IS HELPFUL,WE DO NOT USE IT AS THESOLE BASIS FOR A FUNDING DECISION. THECOMPANYPLAYED NO ROLE IN THE PREPARATIONOF ANY OF THE VALUATION SOURCES OR ANY OTHERMATERIALS PROVIDED BYTHE BORROWER.WHILE WE BELIEVE THE DATA PRIMALOGIST LLC FINANCIAL DATA PROJECTS I REVENUE DATE OF FORMATION * 04/27/2016 Gross Margin% (!) IPRINCIPAL FOCUS Fix & Fiip Loans Funded (!) Loans Repaid (2)PerYear (!) Revenue (!) '----13----'11°II2 II$557K Repayment (!) Time (2)Project Costs (!) 10.0% '--l 12_m_o_n_th_s__,ll$436.7K Reportingperiod:three years ending 2020 20.0% $4.4M $2.6M Reportingperiod:2020 Reportingdate:12/31/20 PROJECT SPECIFIC RISK FACTORS o The Borrower was advanced the money it needs to begin constructi on of this property on February 8, 2021by Groundfloor Finance Inc.("Groundfloor," "we;'"us;' or "our") or a wholly-owned subsidiary of Groundfloor. The Borrower has begun construction of the property. If this offering is fully subscribed,Groundfloor will continue to administer and service the loan as further described in the OfferingCircular. • The construction of the property may be extensive,and therefore subject to delays and other unexpected issues. • The construction willrequire permitting, and permits may not be obtained on time or may be denied. • There will be multiple l oans on this project, each representing subsequent draws. The loans will range from $100,000 to $300,000.The Financial Overvi ew box represents the aggregate amount of all loans to be secured by this property,giving a complete financial pi cture of the project. • There is no existing structure on this property,or if there is,it will be demolished,and a new structure built in its pl ace. • The event of default on one Groundfloor note secured by this property will tri gger default on all Groundfloor notes secured by this property. All LRO holders investing in LROs corresponding to notes secured by this property share the same priority in any recovery and recovered proceeds will be distributed on a pro-rata basis. o This l oan represents the fourth draw for the construction project and is secured by an individual note. o Each draw on this project is structured as an individual loan.We will fund each draw from our own capital or credit facilities as and when requested by the Borrower,provided conditi ons for each draw are met as described in our Offering Circular.Once a draw has been approved and funded,we will then sellthe corresponding seri es of LROs on our platform,each of which will be due 12 months from the time such seri es of LRO is deemed issued,as described in our Offering Circular.Subsequent draws are expected to be requested every two months from the date we advanced the first draw,but may be requested sooner,or later, depending on the progress of constructi on. • Please consult the Offering Circul ar for further discussi on of general risk factors. CLOSING CONDITIONS o Loan is conditi oned upon a clean title search and valid title insurance at the time of close. DEVELOPER FEES • GROUNDFLOOR generally charges borrowers between 2% and 6% of the principal amount of the l oan for our services. • GROUNDFLOOR does not take a 'spread' on any part of the interest payments. • Developers may capitalize the cost of closing into the principal amount of their request.These closing costs typically range from $500 to $1500. • Unless otherwise limited by applicable l aw,GROUNDFLOOR will charge a penalty of 2% for any extension made to the borrower. See GROUNDFLOOR 'Fees and Expenses' in the OfferingCircular SEC FILING INFORMATION • The seri es of LROs corresponding to this Project are offered pursuant to Post Qualification Amendment No.79 to the Offering Circular dated December 29,2017 (each,as amended and supplemented from time to time),including the documents incorporated by ref erence therein. You may access and review these documents on the Internal Filings Directory located on our Platform. DO II · lll .. I I ¥-'-' •. f Address: 3458 ROCKHAVEN ClRCLE NORTHEAST #4,ATLANTA, GA 30324 'Borrower intends to sellthe property to repay the Groundfloor loan. 0"' INVEST NOW As Complete (ARV) $1,095,000 Broker's Price Opinion Borrower Provided Appraisal Borrower Provided Comps After Repair Value (ARV) (!) $1,095,000 TotalProject Costs (!) $855,790 $85,600 0% Skin·in·the· First lien Loan Cushion (!) Game (!) Purchase Price $360,000Loan ToARV70.3% Purchase Date02/08/2021 Loan To Total89.6% (!) (!) (!) VALUATION REPORTS The followingfactors determine in part how the loan was graded: (in descending order of importance) Loan To ARV Score (!) 10 Quality of ValuationReport4 location8 Borrower Experience5 Borrower Commitment (!)1 GRADE FACTORS PROJECT SUMMARY I 3458 ROCKHAVEN CIRCLE NORTHEAST H4, ATLANTA,GA 30324 .•.. . .., ... .... ···--·--Purpose loan Position Total oan Amount Repayment Terms BORROWER L Fi_rs_t_L_ie_n ....JII $110,000 Primalogist llC Click here to view the LRO Agreement INVEST NOW Purchase & Renovation Balloon payment-principaland interest returned on repayment!due at maturity.

 

 PS-979 

 

 

 

 

2 320 BORROWER L Game CD 03/10/2021 81.8% Purchase Date Project Cost View larger map The Borrower intends to use the l oan proceeds to purchase and renovate the property. Upon completion,the Borrower intends to sellthe property to repay the Groundfloor loan. Click here to view the LRO Agreement Map data ®2021 Terms of Use Report a map error Value of Properties CDTotal Debt CD Revenue CD GROUNDFLOOR HISTORY * HISTORICAL AVERAGES Matthew Goff Compl eted Projects Average Project _ ------'11 ° II Time CD L.,l Repayment CD Project Costs CD CONTAINEDTHEREIN IS HELPFUL,WE DO NOT USE IT AS THE SOLE BASISFOR A FUNDING DECISION. THECOMPANYPLAYED NO ROLE IN THE PREPARATIONOF ANY OF THE VALUATION SOURCESORANY OTHERMATERIALS PROVIDED BYTHE BORROWER.WHILE WE BELIEVE THE DATA BORROWERS REPRESENTAND WARRANT THAT INFORMATION SUPPLIED IS ACCURATE. AFH PROPERTIES, LLCFINANCIAL DATAPROJECTS I REVENUE DATE OF FORMATION * 11/13/2018 Gross Margin% CD IPRINCIPAL FOCUS Single Family Loans Funded CDLoans Repaid CDPerYear CDRevenue CD 1 1 II$150K On Time Average Project Average Total 10.0% _'-l _ 9_m_o_nt_h_s ,ll$111K Reportingperiod:three years ending 2020 18.0% $400K $393K Reportingperiod:2020 Reportingdate:12/31/20 UNLESSNOTED WITHA * ,INFORMATIONBELOW IS SUPPLIED BY THE BORROWER AND ISNOT VERIFIED. BORROWER SUMMARY PROJECT SPECIFIC RISK FACTORS • The Borrower was advanced the money it needed to purchase this property on March 10,2021by Groundfloor Finance Inc.("Groundfloor "we";us or "our") or a wholly-owned subsidiary of Groundfloor. The Borrower is now in possession of the property.If this offering is fully subscribed,Groundfloor will continue to administer and service the loan as further described in the Offering Circular. • The renovation of the property may be extensive,and therefore subject to delays and other unexpected issues. • The renovation will require permitting,and permits may not be obtained on time or may be denied. • Please consult the OfferingCircul ar for further discussion of general risk factors. CLOSING CONOITIONS • Loan is conditioned upon a clean title search and valid title insurance at the time of close. DEVElOPER FEES • GROUNDFLOOR generally charges borrowers between 2% and 6% of the principal amount of the l oan for our services. • GROUNDFLOOR does not take a 'spread' on any part of the interest payments. • Developers may capitalize the cost of closing into the principal amount of their request.These closing costs typically range from $500 to $1500. • Unless otherwise limited by applicable l aw,GROUNDFLOOR will charge a penalty of 2% for any extension made to the borrower. See GROUNDFLOOR 'Fees and Expenses' in the Offering Circular SEC FiliNG INFORMATION • The series of LROs corresponding to this Project are offered pursuant to Post Qualification Amendment No.79 to the Offering Circular dated December 29,2017 (each,as amended and supplemented from time to time),including the documents incorporated by reference therein.You may access and review these documents on the Internal Filings Directory located on our Platform. MISCELLANEOUS Address: 171S4 LOGAN CAVE ROAD,SILOAM SPRINGS,AR 72761 ' Go .gle INVEST NOW PROPERTY DESCRIPTION As Complete (ARV) $189,000 Broker's Price Opinion Borrower Provided Appraisal Borrower Provided Comps After RepairValue(ARV) CD$189,000 TotalCosts$148,320 $26,000 0%----Skin-in-the-First lien loanCushion CD Purchase Price$79,000Loan To ARV64.7% Loan To Total CD CD CD VALUATION REPORTS The followingfactors determine in part how the loan was graded: (in descending order of importance) loan To ARV Score CD10 Quality of Valuation Report4 Skin-in-the-Game CD10 location8 Borrower Experience5 Borrower Commitment CD1 GRADE FACTORS FINANCIAL OVERVIEW Rate loanToARVloan Amount Investors Purpose loan Position Total oan Amount Repayment Terms F_i_rs_t_L_ie_n JII $12 , r--'Ba-"l'l-o_o_n_pa_y_m_en--t--p-r-in_c_i_p_la_a_n_d_i_n-et_r_e_s-t-, . . returned on repayment/ due at maturity. AFH ProP-erties,LLC Matthew Goff-principal Cli ck here to view the LRO Agreement INVEST NOW Purchase & Renovation

 

 PS-980 

 

 

 

 

Projected Term Loan ToARV Loan Amount Investors 1 8 Rate Purpose Loan Position Total Loan Amount Repayment Terms FINANCIAL OVERVIEW - 10 Skin-in-the-Game ® PROPERTY DESCRIPTION 3 !< View larger map " Stone Rd o r 5 [ g: 5' • 5' WfW.aide FueddeOr W falirfaK Fairfax Df IDG E CREST GARDENS Borrower intends to sell the property to repay the Groundfloor loan. BiminiDr oatePal<"•Publix Super Market c.yo• LAKESIDE at Regency Crossings ,,,.o, 1e Terms of Use IReport a map error CONDO Go _ _ Map data ®2021 PROPERTY PHOTOS MISCELLANEOUS BORROWER SUMMARY * 'INFORMATIONBELOW IS SUPPLIED BY THE BORROWERAND ISNOT VERIFIED. BORROWERS REPRESENTAND WARRANT THAT INFORMATION SUPPLIED IS ACCURATE. Value of Properties <D Revenue <D Barry Bahr Completed Projects Average Project Repayment <D Time <D Project Costs <D CONTAINEDTHEREIN IS HELPFUL,WE DO NOT USE IT AS THE SOLE BASIS FOR A FUNDING DECISION. THECOMPANYPLAYED NO ROLE IN THE PREPARATIONOF ANY OF THE VALUATION SOURCESOR ANY OTHER MATERIALS PROVIDED BYTHE BORROWER-WHI LE WE BELIEVE THE DATA BAHR ONE PROPERTIES LLC FINANCIAL DATAPROJECTS I REVENUE DATE OF FORMATION * 08/14/2019 Gross Margin% <D IPRINCIPALGROUNDFLOOR HISTORY *HISTORICAL AVERAGES FOCUS Buy& HoldLoans Funded <DLoans Repaid <DPerYear <DRevenue <D Ll1------'11°II 1II $129.5K On TimeAverage Project Average Total 10.0%Ll _ 3_m_o_nt_hs___,II$118.8K Reportingperiod:three years ending 2020 13.0% $129.5K $224K Reporting period:2020 Reportingdate:12/31/20 UNLESSNOTED WITHA PROJECT SPECIFIC RISK FACTORS o The Borrower was advanced the money it needs to begin construction of this property on February 24,2021by Groundfloor Finance Inc.("Groundfloor';"we;'"us;' or "our") or a wholly-owned subsidiary of Groundfloor. The Borrower has begun construction of the property.If this offering is fully subscribed,Groundfloor will continue to administer and service the loan as further described in the OfferingCircular. o The construction of the property may be extensive,and therefore subject to delays and other unexpected issues. o The construction willrequire permitting, and permits may not be obtained on time or may be denied. o There is no existing structure on this property, or if there is,it will be demolished, and a new structure built in its place. o The event of default on one Groundfloor note secured by this property will trigger default on all Groundfloor notes secured by this property. All LRO holders investing in LROs corresponding to notes secured by this property share the same priority in any recovery and recovered proceeds will be distributed on a pro-rata basis. o Please consult the Offering Circular for further discussion of general risk factors. CLOSING CONDITIONS o Loan is conditioned upon a clean title search and valid title insurance at the time of close. DEVElOPER FEES o GROUNDFLOOR generally charges borrowers between 2% and 6% of the principal amount of the loan for our services. o GROUNDFLOOR does not take a 'spread' on any part of the interest payments. o Developers may capitalize the cost of closing into the principal amount of their request.These closing costs typically range from $500 to $1500. o Unless otherwise limited by applicable law,GROUNDFLOOR will charge a penalty of 2% for any extension made to the borrower. See GROUNDFLOOR 'Fees and Expenses' in the OfferingCircular SEC FiliNG INFORMATION o The series of LROs corresponding to this Project are offered pursuant to Post Qualification Amendment No.79 to the OfferingCircular dated December 29,2017 (each,as amended and supplemented from time to time),including the documents incorporated by reference therein. You may access and review these documents on the Internal Filings Directory located on our Platform. '" •Mapklhurst OrAddress: 6912 SANDALWOOD DRIVE,PORT RICHEY,FL 34668 .. ...... "'' 5' 'NO¥& ScotNI Of The Borrower intends to use the loan proceeds to complete a new construction.Upon completion,the 0 F RIDGE 9 f"\1<:> 1.:\IClick here to view the LRO Agreement INVEST NOW As Complete (ARV) $190,000 Broker's Price Opinion Borrower Provided Appraisal Borrower Provided Comps $190,000 TotalProject Costs (!) $159,640 $25,500 0% ----Skin-in-theFirst Lien LoanCushion (!) Game ® Purchase Price $19,000 LoanToARV70.6% Purchase Date 08/10/2020 Loan To Total83.5% Project Cost ® (!) (!) VALUATION REPORTS The followingfactors determine in part how the loan was graded: (in descendingorder of importance) Loan To ARV Score (!) 10 Quality of ValuationReport4 Location8 Borrower Experience5 Borrower Commi tment (!) 1 GRADE FACTORS PROJECT SUMMARY I 6912 SANDALWOOD DRIVE,PORT RICHEY,FL 34668 I BORROWER Bahr One ProP-erties LLC Barry Bahr-principal '---F-i_rs_t_L_ie_n _,ll $134,140 Click here to view the LRO Agreement INVEST NOW New Construction Balloon payment - principaland interest returned on repayment/ due at maturity.

 

 PS-981 

 

 

 

 

5 080 BORROWER L Skin-in-the-Game (!) 10 location 8 Project Cost . PROPERTY DESCRIPTION View larger map ftAyers Drywall, Borrower intends to sell the property to repay the Groundfloor loan. W•Couoty Hwy 62 ' <·; Click here to view the LRO Agreement Map data ®2021 Terms of Use Report a map error . . BORROWER SUMMARY Value of Properties (!) Revenue (!) GROUNDFLOOR HISTORY * HISTORICAL AVERAGES Matthew Goff Completed Projects Average Project II II ° 1-----'11 1 Ll $150K --'II 1 0.0% $111K CONTAINEDTHEREIN IS HELPFUL,WE DONOT USE IT AS THE SOLE BASIS FORA FUNDING DECISION. THECOMPANYPLAYED NO ROLE IN THE PREPARATION OF ANYOF THE VALUATION SOURCES OR ANY OTHER MATERIALS PROVIDED BYTHE BORROWER. WHILE WE BELIEVE THE DATA BORROWERS REPRESENTAND WARRANT THAT INFORMATION SUPPLIED IS ACCURATE. AFH PROPERTIES, LLCFINANCIAL DATA PROJECTS I REVENUE DATE OF FORMATION * 11/13/2018 Gross Margin% (!) IPRINCIPAL FOCUS Single FamilyLoans Funded (!) Loans Repaid (!) PerYear (!) Revenue (!) On TimeAverage Project Average Total Repayment (!) Time <!>Project Costs <!> Ll _ 9_m_o_nt_hs_ Reporting period:three years ending 2020 18.0% $400K $393K Reporting period:2020 Reportingdate:12/31/20 UNLESSNOTED WITHA * 'INFORMATIONBELOW IS SUPPLIED BY THE BORROWER AND ISNOT VERIFIED. MISCELLANEOUS PROJECT SPECIFIC RISK FACTORS o The Borrower was advanced the money it needed to purchase this property on March 9,2021by Groundfloor Finance Inc.("Groundfloor ·"we';"us;·or "our") or a wholly-owned subsidiary of Groundfloor. The Borrower is now in possession of the property.If this offering is fully subscribed,Groundfloor will continue to administer and service the loan as further described in the Offering Circular. o The renovation of the property may be extensive,and therefore subject to delays and other unexpected issues. o The renovation will require permitting,and permits may not be obtained on time or may be denied. o Please consult the OfferingCircular for further discussion of general risk factors. CLOSING CONOITIONS o Loan is conditioned upon a clean title search and valid title insurance at the time of close. DEVElOPER FEES o GROUNDFLOOR generally charges borrowers between 2% and 6% of the principal amount of the loan for our services. o GROUNDFLOOR does not take a 'spread' on any part of the interest payments. o Developers may capitalize the cost of closing into the principal amount of their request.These closing costs typically range from $500 to $1500. o Unless otherwise limited by applicable law,GROUNDFLOOR will charge a penalty of 2% for any extension made to the borrower. See GROUNDFLOOR 'Fees and Expenses' in the OfferingCircular SEC FiliNG INFORMATION o The series of LROs corresponding to this Project are offered pursuant to Post Qualification Amendment No. 79 to the OfferingCircular dated December 29,2017 (each,as amended and supplemented from time to time),including the documents incorporated by reference therein. You may access and review these documents on the Internal Filings Directory located on our Platform. Address: 12425 BETHEL BLACKTOP ROAD,FARMINGTON,AR 72730 T Insulation & Sup .r"-The Borrower intends to use the loan proceeds to purchase and renovate the property. Upon completion,the & Go gleLot at Jim Brooks Rd INVEST NOW As Complete (ARV) $250,000 Broker's Price Opinion Borrower Provided Appraisal Borrower Provided Comps After RepairValue (ARV) (!) $250,000 TotalProject Costs (!) $151,580 $16,500 0% Skin-in-theFirst li en LoanCushion (!) Game (!) Purchase Price $89,000Loan To ARV 54.0% Purchase Date03/09/2021Loan To Total88.7% (!) (!) (!) VALUATION REPORTS The followingfactors determine in part how the loan was graded: (in descendingorder of importance) Loan To ARV Score (!) 10 Quality of ValuationReport4 - Borrower Experience5 Borrower Commitment (!) 1 GRADE FACTORS FINANCIAL OVERVIEW Rateloan ToARV loan AmountInvestors Purposeloan PositionTotal oan Amount Repayment Terms F_i_rs_t_L_ie_n JII $13 , ,--:Ba-..l:.l..o_o_n_pay_m_en__t-p_ -rinc_i_p_al_a_n_d_i_nte_r_e_s-t-, . . returned on repayment!due at maturity. AFH ProP-erties,LLC Matthew Goff-principal Click here to view the LRO Agreement INVEST NOW Purchase & Renovation

 

 PS-982 

 

 

 

 

.::. I ------------------------------------------------------------02/19/2021 81.3% Purchase Date Project Cost ® .. o6 3.. • Address: 878 BLUEJAY STREET,PALM BAY,FL 32908 ",. .. "•' -,:,....-Wren St : .f.. § (..I,.) <.. n "' • gn. .. The Borrower intends to use the loan proceeds to complete a new construction.Upon completion, the Borrower intends to sell the property to repay the Groundfloor loan. Cr SW "• Robin S1 .5. i 3 < ::: 0,. :;-" (I) ::E [ ;[ .. c. < < .. .. >tenl<o SlSW (I) (I) ::E Nigll1engale Sl < < ::E Click here to view the LRO Agreement Map data ©2021 Terms of Use II T lt liH U - II T il 'liH U ·,.. II I I I Ill Ill I _ • 11 m Tl II'• ,Ill II', I II FRONT lllVAllON TotalDebt (!) Revenue (!) HISTORICAL AVERAGES GROUNDFLOOR HISTORY * Patricia Christian Completed Projects Average Project 1'-1 _11 ° II 1 $95K II A CONTAINED THEREINIS HELPFulW, E DONOT USE IT AS THE SOLE BASIS FORA FUNDING DECISIOt-. HE COMPANY PLAYED NOROLE IN THE PREPARATIOt-1 OF ANY OF THE VALUATION SOuRCES OR ANY OTHER MATERIALS PROVIDED BY THE BORROWER. WHILE WE BELIEVE THE DA MAGNOLIA HOM E I NC FINANCIAL DATAPROJECTS/REVENUE k n1 r·o DATE OF FORMATION * 04/27/2008 Gross Margin% (!) PRINCIPAL (. FOCUS Single FamilyLoans Funded (!)Loans Repaid (!)Per Year (!)Revenue (!) On Time Average ProjectAverage Total Repayment (!)Time (!)Project Costs (!) IO.O"J.: IL-4_m_on_th_s_,ll$81K , ending 2020 hr "' o-. 0.0% /20 PROJECT SPECIFIC RISK FACTORS • The Borrower was advanced the money it needs to begin construction of this property on February 19,2021by Groundfloor Finance Inc. ("Groundfloor," "we;·"us;· or "our") or a wholly-owned subsidiary of Groundfloor.The Borrower has begun construction of the property.If this offering is fully subscribed,Groundfloor will continue to administer and service the loan as further described in the Offering Circular. • The Borrower has not completed or sold any projects in the past year.As such, the Borrower's average revenue,costs,and margins cannot be calculated. • The construction of the property may be extensive, and therefore subject to delays and other unexpected issues. • The construction will require permitting,and permits may not be obtained on time or may be denied. • There is no existing structure on this property,or if there is,it will be demolished,and a new structure built in its place. • The event of default on one Groundfloor note secured by this property will trigger default on all Groundfloor notes secured by this property. All LRO holders investing in LROs corresponding to notes secured by this property share the same priority in any recovery and recovered proceeds will be distributed on a pro-rata basis. • Please consult the Offering Circular for further discussion of general risk factors. ClOSING CONDITIONS • Loan is conditioned upon a clean title search and valid title insurance at the time of close. DEVElOPER FEES • GROUNDFLOOR generally charges borrowers between 2% and 6% of the principal amount of the loan for our services. • GROUNDFLOOR does not take a 'spread' on any part of the interest payments. • Developers may capitalize the cost of closing into the principal amount of their request.These closing costs typically range from $500 to $1500. • Unless otherwise limited by applicable law,GROUNDFLOOR will charge a penalty of 2% for any extension made to the borrower.See GROUNDFLOOR 'Fees and Expenses' in the Offering Circular SEC FlUNG INFORMATION • The series of LROs corresponding to this Project are offered pursuant to Post Qualification Amendment No.79 to the Offering Circular dated December 29,2017 (each,as amended and supplemented from time to time), including the documents incorporated by reference therein. You may access and review these documents on the InternalFilings Directory located on our Platform. ;.J. I"JC I lL 1,.111 1 ' " ll PROPERTY DESCRIPTION <,-. .< .< < Sandlewood St z 0 l View larger map Hoja St .! .. .. •< Unc:a1SI SW OwiSI lAVeGo gle INVEST NOW As Complete (ARV) A I I • $255,000 Broker's Price Opinion Borrower Provided Appraisal Borrower Provided Comps VALUATION REPORTS The followingfactors determine in part how the loan was graded: (in descendingorder of importance} LoanTo ARV Score (!)10 Quality of Valuation Report4 Skin in·the·Game (!)10 Location8 Borrower Experience5 Borrower Commitment (!)1 GRADE FACTORS FINANCIAL OVERVIEW After Repair Value (ARV) (!) $255,000 $166,130 0% ----Skin-in-the· First Lien LoanCushion (!) Game(!) Purchase Price (!)$10,000 Loan ToARV (!} 53.4% Loan To Total PROJECT SUMMARYI 878 BLUEJAY STREET,PALM BAY,FL 32908 -·RateProjected TermLoanToARVLoan AmountInvestors . BORROWER PurposeLoan PositionTotal Loan Amount Repayment Terms MAGNOLIA HOME INC L.. Fi_rs_t_Li_e_n JII $136,130 Patricia Christian - principal Click here to view the LRO Agreement INVEST NOW New Construction Balloon payment·principal and interest returned on repayment I due at maturity.

 

 PS-983 

 

 

 

 

loan ToARV Investors Rate loan Amount ..,·... n.. Biodun Bankole - principal FINANCIAL OVERVIEW - Skin in·the Game (!) 10 Project Cost PROPERTY DESCRIPTION The Borrower intends to use the l oan proceeds to complete a new construction.Upon completi on,the "1'l o+. (So. femclift RdNE Go gle Click here to view the LRO Agreement Map data ®2021 Goog!e Terms of Use Report a map error PROPERTY PHOTOS . =-.. • ••' , T ··r r r r T "-'.., II I •0 ·a. .. t'C Flo Ill L_ ..L...L..L......L..L..J.J..O..-......L-t-t....................,.,......_.,_ .............I..I..... ' t Ir-n"' a I·r I II '' II 1ab Ceili IIIII Mah Ftoo I II ,• Iall(,u;rtl btl 1t1a ..... ,""...,·o c MISCELLANEOUS BORROWER SUMMARY UNLESSNOTEDWITHA ,.,INFORMATIONBELOW IS SUPPLIED BY THE BORROWERAND ISNOT VERIFIED. BORROWERS REPRESENTAND WARRANT THAT INFORMATION SUPPLIED IS ACCURATE. Value of Properties (2)Total Debt (2) Revenue (2) GROUNDFLOOR HISTORY * HISTORICAL AVERAGES Bi odun Bankol e Compl eted Projects Average Project On Time Average Project Average Total CONTAINEDTHEREIN IS HELPFUL,WE DO NOT USE IT AS THESOLE BASIS FOR A FUNDING DECISION. THECOMPANYPLAYED NO ROLE IN THE PREPARATIONOF ANY OF THE VALUATION SOURCES OR ANY OTHERMATERIALS PROVIDED BYTHE BORROWER.WHILE WE BELIEVE THE DATA PRIMALOGIST LLC FINANCIAL DATA PROJECTS I REVENUE DATE OF FORMATION * 04/27/2016 Gross Margin% (!) IPRINCIPAL FOCUS Fix & Fiip Loans Funded (!) Loans Repaid (2)PerYear (!) Revenue (!) '----13----'11°II2 II$557K Repayment (!) Time (2)Project Costs (!) 10.0% '--l 12_m_o_n_th_s__,ll$436.7K Reportingperiod:three years ending 2020 20.0% $4.4M $2.6M Reportingperiod:2020 Reportingdate:12/31/20 PROJECT SPECIFIC RISK FACTORS o The Borrower was advanced the money it needs to begin constructi on of this property on February 8, 2021by Groundfloor Finance Inc.("Groundfloor "we;'"us;· or "our") or a wholly-owned subsidiary of Groundfloor. The Borrower has begun construction of the property. If this offering is fully subscribed,Groundfloor will continue to administer and service the loan as further described in the OfferingCircular. • The construction of the property may be extensive,and therefore subject to delays and other unexpected issues. • The construction willrequire permitting, and permits may not be obtained on time or may be denied. • There will be multiple l oans on this project, each representing subsequent draws. The loans will range from $250,000 to $271,000.The Financial Overvi ew box represents the aggregate amount of all loans to be secured by this property,giving a complete financial pi cture of the project. • There is no existing structure on this property,or if there is,it will be demolished,and a new structure built in its pl ace. • The event of default on one Groundfloor note secured by this property will tri gger default on all Groundfloor notes secured by this property. All LRO holders investing in LROs corresponding to notes secured by this property share the same priority in any recovery and recovered proceeds will be distributed on a pro-rata basis. o This l oan represents the second draw for the construction project and is secured by an individual note. o Each draw on this project is structured as an individual loan.We will fund each draw from our own capital or credit facilities as and when requested by the Borrower,provided conditi ons for each draw are met as described in our Offering Circular.Once a draw has been approved and funded,we will then sellthe corresponding seri es of LROs on our platform,each of which will be due 12 months from the time such seri es of LRO is deemed issued,as described in our Offering Circular.Subsequent draws are expected to be requested every two months from the date we advanced the first draw,but may be requested sooner,or later, depending on the progress of constructi on. • Please consult the Offering Circul ar for further discussi on of general risk factors. CLOSING CONDITIONS o Loan is conditi oned upon a clean title search and valid title insurance at the time of close. DEVELOPER FEES • GROUNDFLOOR generally charges borrowers between 2% and 6% of the principal amount of the l oan for our services. • GROUNDFLOOR does not take a 'spread' on any part of the interest payments. • Developers may capitalize the cost of closing into the principal amount of their request.These closing costs typically range from $500 to $1500. • Unless otherwise limited by applicable l aw,GROUNDFLOOR will charge a penalty of 2% for any extension made to the borrower. See GROUNDFLOOR 'Fees and Expenses' in the OfferingCircular SEC FILING INFORMATION • The seri es of LROs corresponding to this Project are offered pursuant to Post Qualification Amendment No.79 to the Offering Circular dated December 29,2017 (each,as amended and supplemented from time to time),including the documents incorporated by ref erence therein. You may access and review these documents on the Internal Filings Directory located on our Platform. DO II · lll .. l I I ¥-'-· •. f Address: 3458 ROCKHAVEN ClRCLE NORTHEAST #2,ATLANTA, GA 30324 'Borrower intends to sellthe property to repay the Groundfloor loan. 0"' INVEST NOW As Complete (ARV) $1,095,000 Broker's Price Opinion Borrower Provided Appraisal Borrower Provided Comps After Repair Value (ARV) (!) $1,095,000 TotalProject Costs (!) $855,790 $85,600 0% Skin·in·the· First lien Loan Cushion (!) Game (!) Purchase Price $360,000Loan ToARV70.3% Purchase Date02/08/2021 Loan To Total89.6% (!) (!) (!) VALUATION REPORTS The followingfactors determine in part how the loan was graded: (in descending order of importance) Loan To ARV Score (!) 10 Quality of ValuationReport4 location8 Borrower Experience5 Borrower Commitment (!)1 GRADE FACTORS PROJECT SUMMARY I 3458 ROCKHAVEN CIRCLE NORTHEAST H2, ATLANTA,GA 30324 .•.. . .., ... .... ···--·--Purpose loan Position Total oan Amount Repayment Terms BORROWER L Fi_rs_t_L_ie_n ....JII $150,190 Primalogist llC Click here to view the LRO Agreement INVEST NOW Purchase & Renovation Balloon payment-principaland interest returned on repayment!due at maturity.

 

 PS-984 

 

 

 

 

II !D Rate Projected Term oan ToARV loan Amount Investors I ,__ F_i_rs_t_L_ie_n ,ll BORROWER $ 5 , ,..=B:..:a.:.cllo.:.:.o=n.:.:....:.pa:.:.y.:.:.m:.::.n._e_-t--p-r-in_c_i_p-la_a_n_d_i_n-et_r_e_s-t-, returned on repayment/ due at maturity. _ . . First Homes,LLC I - Skinin·ht e Game Q) 10 I Game Q) 02/04/2021 84.0% Purchase Date Project Cost View larger map The Borrower intends to use the loan proceeds to complete a new construction.Upon completion,the Borrower intends to sellthe property to repay the Groundfloor loan. ine M:>V, " '0 B a,. + T All-Secure Alarcso 9le r:-:: •• I .. , iJ HISTORICAL AVERAGES GROUNDFLOOR HISTORY * Neil Sutton JR Completed Projects Average Project II 2 1 3 $150K CONTAINEDTHEREIN IS HELPFUL,WE DONOT USE IT AS THE SOLE BASIS FOR A FUNDING DECISION. THECOMPANYPLAYED NO ROLE IN THE PREPARATIONOF ANY OF THE VALUATION SOURCESOR ANY OTHER MATERIALS PROVIDED BYTHE BORROWER.WHILE WE BELIEVE THEDATA UNLESSNOTEDWITH A ... ,INFORMATIONBELOW IS SUPPLIED BY THE BORROWER AND ISNOT VERIFIED. BORROWERS REPRESENTAND WARRANT THAT INFORMAT ON SUPPLIED IS ACCURATE. FIRST HOMES, LLCFINANCI AL DATA PROJECTS / REVENUE DATE OF FORMATION * 04/27/2020 Gross Margin% Q) IPRINCIPAL FOCUS Single FamilyLoans Funded Q) Loans Repaid Q) PerYear Q)Revenue Q) L l_ ----'IIII On TimeAverage Project Average Total Repayment Q)Time Q)Project Costs Q) 1100.0% _Ll _ 15 mon_th_s ,ll $40K Reportingperiod:three years ending 2020 0.0% Reportingperiod:2020 Reportingdate:12/31/20 BORROWER SUMMARY PROJECT SPECIFIC RISK FACTORS • The Borrower was advanced the money it needs to begin construction of this property on February 4,2021by Groundfloor Finance Inc.("Groundfloor ·"we;'"us, or "our") or a wholly-owned subsidiary of Groundfloor. The Borrower has begun construction of the property. If this offering is fully subscribed,Groundfloor will continue to administer and service the loan as further described in the OfferingCircular. • The construction of the property may be extensive,and therefore subject to delays and other unexpected issues. • The construction willrequire permitting, and permits may not be obtained on time or may be denied. • There is no existing structure on this property,or if there is,it will be demolished,and a new structure built in its place. • The event of default on one Groundfloor note secured by this property will trigger default on all Groundfloor notes secured by this property. All LRO holders investing in LROs corresponding to notes secured by this property share the same priority in any recovery and recovered proceeds will be distributed on a pror·ata basis. • The Borrower has not completed or sold any projects in the past year.As such,the Borrower's average revenue,costs,and margins cannot be calculated. • Please consult the Offering Circular for further discussion of general risk factors. CLOSING CONOITIONS • Loan is conditioned upon a clean title search and valid title insurance at the time of close. DEVElOPER FEES • GROUNDFLOOR generally charges borrowers between 2% and 6% of the principal amount of the loan for our services. • GROUNDFLOOR does not take a 'spread' on any part of the interest payments. • Developers may capitalize the cost of closing into the principal amount of their request.These closing costs typically range from $500 to $1500. • Unless otherwise limited by applicable law,GROUNDFLOOR will charge a penalty of 2% for any extension made to the borrower. See GROUNDFLOOR 'Fees and Expenses' in the Offering Circular SEC FILING INFORMATION • The series of LROs corresponding to this Project are offered pursuant to Post Qualification Amendment No.79 to the Offering Circular dated December 29,2017 (each,as amended and supplemented from time to time),including the documents incorporated by reference therein. You may access and review these documents on the Internal Filings Directory located on our Platform. MISCELLANEOUS PROPERTY PHOTOS Address: 639 MOUNTAIN PLACE,ALBEMARLE,NC 28001 tauornvay ' & Elect..M;pd;ta ®2021 Terms of Use R eport a map errorClick here to view the LRO Agreement INVEST NOW p\an PROPERTY DESCRIPTION AfterValue$215,000 TotalProject Costs Q)$179,933 $27,943 0%----Skin-in-the·First li en loanCushion Q) Purchase Price $9,043 Loan ToARV 70.7% Loan To Total Q) Q) Q) VALUATION REPORTS As Complete (ARV) $215,000 Broker's Price Opinion Borrower Provided Appraisal Borrower Provided Comps FINANCIAL OVERVIEW GRADE FACTORS The followingfactors determine in part how the loan was graded: (in descending order of importance) Loan To ARV Score Q)10 Quality of ValuationReport4 location8 Borrower Experience5 Borrower Commitment Q)1 .. ·'• ·-............ Purposeloan Position Total oan Amount Repayment Terms 1 1990 Neil Sutton JR ·principal ' Click here to view the LRO Agreement INVEST NOW New Construction I p '!!} n •

 

 PS-985 

 

 

 

 

64, ,--:a..:.l..lo_o_n_p_ay_m_e_n_t -p_ -ri nc_i_p_a_l a_n_d_i_nte_r_e_s-t-, retu rned on repayme nt/ due at matu r i ty. . . David Cooper - principal FINANCIAL OVERVIEW - - Skin-in-the-Game CD 10 Borrower Experience 5 Cushion CD Skin-in-the First lien Loan 89.6% 02/18/2021 Purchase Date Project Cost PROPERTY DESCRIPTION View larger map ;tal Servi ce T g_ t m SE, Atlanta,GA 30315 Borrower intends to sellthe property to repay the Groundfloor loan. Tu1man AveSE HE IG HT S Click here to view the LRO Agreement Map data ®2021 1 Terms of Use Report a map error MISCELLANEOUS BORROWER SUMMARY 'INFORMATIONBELOW ISSUPPLIEDBYTHE BORROWERAND ISNOT VERIFIED. BORROWERS REPRESENTAND WARRANT THAT INFORMATION SUPPLIED IS ACCURATE. David Cooper Compl eted Projects Average Project 1 $O CONTAINEDTHEREIN IS HELPFUL,WE DO NOT USE IT AS THE SOLE BASIS FORA FUNDING DECISION, THECOMPANYPLAYED NO ROLE IN THE PREPARATIONOF ANYOF THE VALUATION SOURCES OR ANY OTHERMATERIALS PROVIDED BYTHE BORROWER.WHILE WE BELIEVE THE DATA WCM & ASSOCIATES LLC FINANCIAL DATAPROJECTS I REVENUE DATE OF FORMATION * 12/28/2020 Gross Margin% CD IPRINCIPALGROUNDFLOOR HISTORY *HISTORICAL AVERAGES FOCUS Single FamilyLoans Funded CDLoans Repaid CDPerYear CDRevenue CD L l------'11°IIoII On TimeAverage Project Average Total Repayment CDTime CDProject Costs CD 10.0%L_l_o_m_o_nt_hs_--'11$0 Reportingperiod:three years ending 2020 0.0% Reportingperiod:2020 Reportingdate:12/31/20 UNLESSNOTED WITHA PROJECT SPECIFIC RISK FACTORS o The Borrower was advanced the money it needed to purchase this property on February 18,2021by Groundfloor Finance Inc.("Groundfloor;'"we;'"us;'or "our") or a wholly-owned subsidiary of Groundfloor.The Borrower is now in possession of the property. If this offering is fully subscribed,Groundfloor will continue to administer and service the loan as further described in the Offering Circular. o The renovation of the property may be extensive,and therefore subject to delays and other unexpected issues. o The renovation will require permitting,and permits may not be obtained on time or may be denied. o The Borrower has not compl eted or sold any projects in the past year.As such,the Borrower's average revenue,costs, and margins cannot be calculated. o The Principal has not yet compl eted or sold any projects.As such,the Principal's average revenue,costs,and margins cannot be calculated. o Please consult the Offering Circular for further discussion of general risk factors. CLOSING CONDITIONS o Loan is conditioned upon a clean title search and valid title insurance at the time of close. DEVElOPER FEES o GROUNDFLOOR generally charges borrowers between 2% and 6% of the principal amount of the loan for our services. o GROUNDFLOOR does not take a 'spread' on any part of the interest payments. o Developers may capitalize the cost of closing into the principal amount of their request.These closing costs typically range from $500 to $1500. o Unless otherwise limited by applicable law,GROUNDFLOOR will charge a penalty of 2% for any extension made to the borrower. See GROUNDFLOOR 'Fees and Expenses' in the Offering Circular SEC FILING INFORMATION o The series of LROs corresponding to this Project are offered pursuant to Post Qualification Amendment No.79 to the Offering Circular dated December 29,2017 (each,as amended and supplemented from time to time),including the documents incorporated by reference therein. You may access and review these documents on the Internal Filings Directory located on our Platform. Address: 11100AK KNOLL TERRACE SOUTHEAST,ATLANTA, GA30315 tited StatesB a 1110 Oak Knoll TerraceThe Borrower intends to use the loan proceeds to purchase and renovate the property. Upon compl etion,the (/) LAK E WOOD ' ®Go gle INVEST NOW As Complete (ARV) $250,000 Broker's Price Opinion Borrower Provided Appraisal Borrower Provided Comps After RepairValue (ARV) CD$250,000 TotalProject Costs CD$182,610 $18,400 0% Game CD Purchase Price$78,000 Loan To ARV65.7% Loan To Total CD CD CD VALUATION REPORTS The following factors determine in part how the loan was graded: (in descendingorder of importance) Loan To ARV Score CD10 Quality of ValuationReport4 location8 Borrower Commitment CD1 GRADE FACTORS Rate loan ToARV loan AmountInvestors Purposeloan PositionTotal oan Amount Repayment Terms F_i_rs_t_L_i e_n JII $1 210 L BORROWER WCM & ASSOCIATES LLC Click here to view the LRO Agreement INVEST NOW Purchase & Renovation

 

 PS-986 

 

 

 

 

• . . '-------------------------------------------------------------02/22/2021 Project Cost (!} \ . Address: 147 MECHANIC ST.GARDNER.MA01440 i Go gle r ' Value of Properties (!) TotalDebt (!) Completed Projects (!) Revenue (!) GROUNDFLOOR HISTORY * HISTORICAL AVERAGES Completed Projects Average Project I. 1_11 II 2 o II $233.8K 1 0.0% IL 7_m_on_th_s_--'ll $170.3K CONTAINED THEREINIS HELPFuL.WE DONOT USE IT AS THE SOLE BASIS FORA FUNDING DECISION. THE COMPANY PLAYED NO ROLE IN THE PREPARATION OF ANY OF THE VALUATION SOuRCES OR ANY OTHER MATERIALS PROVIDED BY THE BORROWER. WHILE WE BELIEVE THE DATA * BORROWERS REPRESENT AND WARRANT THAT INFORMATION SUPPLIED IS ACCURATE. PROPERTY FORESIGHT,INC.FINANCIAL DATAPROJECTS/REVENUE Rrt 1R t DATE OF FORMATION * 02/09/2019 Gross Margin% (!) PRNI CIPAL Chad King FOCUS Fix&FiipLoans Funded (!) Loans Repaid (!) PerYear (!) Revenue (!) On Time Average ProjectAverage Total Repayment (!) Time (!) Project Costs (!) Report:ng per"od:three years ending 2020 30.9% $470.9K $235K ) •() /20 ,INFORMATION BELOW IS SUPPLIED BY THE BORROWER ANDIS NOT VERIFIED. UNLESS NOTEDWI TH A BORROWER SUMMARY MI SCELLANEOUS PROJECT SPECIFIC RISK FACTORS • The Borrower was advanced the money it needed to purchase this property on February 22,2021by Groundfloor Finance Inc.("Groundfloor·;"we;·"us;·or "our") or a wholly-owned subsidiary of Groundfloor.The Borrower is now in possession of the property. If this offering is fully subscribed,Groundfloor will continue to administer and service the loan as further described in the Offering Circular. • The renovation of the property may be extensive,and therefore subject to delays and other unexpected issues. • The renovation will require permitting,and permits may not be obtained on time or may be denied. • Please consult the Offering Circular for further discussion of general risk factors. CLOSING CONDITIONS • Loan is conditioned upon a clean title search and valid title insurance at the time of close. DEVELOPER FEES • GROUNDFLOOR generally charges borrowers between 2% and 6% of the principal amount of the loan for our services. • GROUNDFLOOR does not take a 'spread' on any part of the interest payments. • Developers may capitalize the cost of closing into the principal amount of their request. These closing costs typically range from $500 to $1500. • Unless otherwise limited by applicable law.GROUNDFLOOR will charge a penalty of 2% for any extension made to the borrower.See GROUNDFLOOR 'Fees and Expenses' in the Offering Circular SEC FILING INFORMATION • The series of LROs corresponding to this Project are offered pursuant to Post Qualification Amendment No.79 to the Offering Circular dated December 29,2017 (each,as amended and supplemented from time to time).including the documents incorporated by reference therein. You may access and review these documents on the InternalFilings Directory located on our Platform. PROPERTY DESCRIPTION • The Borrower intends to use the loan proceeds to purchase and renovate the property.Upon completion, the Borrower intends to sell the property to repay the Groundfloor loan. Planet F·i olet McDonalds Map data C2021 Terms of use Click here to view the LRO Agreement INVEST NOW As Complete (ARV) $240,000 Broker's Price Opinion Borrower Provided Appraisal Borrower Provided Comps VALUATION REPORTS The following factors determine in part how the loan was graded: (in descendingorder of importance) LoanToARVScore (!) 10 Quality of Valuation Report 4 Skin-in-the-Game (!) 10 Location8 Borrower Experience5 Borrower Commitment (!) 1 GRADEFACTORS FINANCIAL OVERVIEW $240,000 Total Project Costs (!) $197,060 0% ----Skin-in-the First Lien LoanCushion (!) Game (!) Purchase Price (!} $182,000LoanToARV (!} 70.4% Purchase Date Loan To Total 85.4% RateProjected TermLoanToARV Loan Amount Investors PurposeLoan Position Total Loan Amount Repayment Terms F_ri_st_L_i_e_n _, I $169 060 BORROWER ProQertY. Foresight, Inc. Chad King-principalClick here to view the LRO Agreement INVEST NOW r--8'--al-'--lo_o_n_p_a_y_m_e_n_t-_-p-ri-nc-i-pa_l_a_n_d_ni -t-e-re_s ,t returned on repayment I due at maturity. Purchase & Renovation

 

 PS-987 

 

 

 

 

DFW Investment ProP.erties Fi_rs_t_L_ie_n _JII $172,750 Alfredo Goytia - principal L_ ------------------------------------------------------------01/21/2021 Purchase Date 1 Project Cost (!) 1 l Toplea Or .. Toplea Dr .'"So;;f "0 c'5 .".. ", .. Q. .. 0 - A Click here to view the LRO Agreement Map data ©2021 Terms of Use Report a map error Total Debt (!) Revenue (!) GROUNDFLOOR HISTORY * HISTORICAL AVERAGES Completed Projects Average Project 1'-9_11 II 6 1 II $149K THE THE CONTAINED THEREIN S HELPFUL,WE DO NOTUSE IT AS THE SOLE BASIS FOR A FUNDING DECISION. PREPARATION OF ANY OF THE VALUATION SOURCES OR ANY OTHER MATERIALS PROVIDED BY THE BORROWER.WHILE WE BELIEVE THE DATA COMPANY PLAYED NO ROLE IN DFW INVESTMENT PROPERTIESFINANCIAL DATAPROJECTS/ REVENUE ENTERPRISES DATE OF FORMATION * 08/11/2020 Gross Margin % (!) PRINCIPAL Alfredo Goytia FOCUS Buy&Hold Loans Funded (!) Loans Repaid (!) Per Year (!) R evenue (!) On Time Average Project Average Total R epayment (!) Time (!) Project Costs (!) 133.0%I'-_ 1_1_m_o_nt_hs I, I$106K Reporting period: three years ending 2020 0.0% R(;porting period:2020 R<.portmgdate:12/31/20 PROJECT SPECIFIC RISK FACTORS • The Borrower was advanced the money it needed to purchase this property on January 21, 2021by Groundfloor Finance Inc.("Groundfloor;·"we," "us;'or "our") or a wholly-owned subsidiary of Groundfloor.The Borrower is now in possession of the property. If this offering is fully subscribed,Groundfloor will continue to administer and service the loan as further described in the Offering Circular. • The renovation of the property may be extensive,and therefore subject to delays and other unexpected issues. • The renovation will requir e permitting,and permits may not be obtained on time or may be denied. • The Borrower has not completed or sold any projects in the past year. As such, the Borrower's average r evenue,costs,and margins cannot be calculated. • The borrower has had late repayments,but has repaid all loans in full, with all interest and fees due. • Please consult the Offering Circular for further discussion of general risk factors. CLOSING CONDITIONS • Loan is conditioned upon a clean title search and valid title insurance at the time of close. DEVELOPER FEES • GROUNDFLOOR generally charges borrowers between 2% and 6% of the principal amount of the loan for our services. • GROUNDFLOOR does not take a 'spread' on any part of the interest payments. • Developers may capitalize the cost of closing into the principal amount of their request. These closing costs typically range from $500 to $1500. • Unless otherwise limited by applicable law,GROUNDFLOOR will charge a penalty of 2% for any extension made to the borrower.See GROUNDFLOOR 'Fees and Expenses' in the Offering Circular SEC FILING INFORMATION • The series of LROs corresponding to this Project are offered pursuant to Post Qualification Amendment No. 79 to the Offering Circular dated December 29, 2017 {each,as amended and supplemented from time to time), including the documents incorporated by reference therein. You may access and review these documents on the InternalFilings Directory located on our Platform. PROPERTY DESCR IPTION View larger mapKynette Dr Address: 1611SIGNET DRIVE,EULESS,TX 76040 Ql Kyne\\• 1611 Signet Dr,'The Borrower intends to use the loan proceeds to purchase and renovate the property.Upon completion, the Sognet orSignfi Dr Euless, TX 76040Borrower intends to sell the property to repay the Groundfloor loan. Wondlea0r ,.li'Wlndlea Or Cha 0 Sagebr•Go 'gle Euless Guns & Ammo INVEST NOW ! " i As Complete {ARV) $235,000 Broker's Price Opinion Borrower Provided Appraisal Borrower Provided Comps 4 I I .. VALUATION REPORTS The following factors determine in part how the loan was graded: (in descending order of importance) Loan ToARVScore (!) 10 Quality of Valuation Report4 Skin-in-the-Game (!) 0 10 Location8 Borrower Experience5 Borrower Commitment (!) 1 GRADEFACTORS FINANCIAL OVERVIEW After Repair Value (ARV) (!) $235,000 $172,750 0% --------------------------------Skin-in-theFirst Lien LoanCushion (!) Game (!) Purchase Price (!) $144,660 Loan To ARV {!) 73.5% Loan To Totall 1oo.o% $172,750 RateProjected TermLoan ToARVLoan Amount Investors BORROWER PurposeLoan PositionTotal Loan Amount Repayment Terms EnterP.rises Click here to view the LRO Agreement INVEST NOW Purchase& Renovation Balloon payment-principal and interest returned on repayment I due at maturity.

 

 PS-988 

 

 

 

 

DFW Investment ProQerties 173 250 I @§Iftlfi1¥t.1Jet:J#jefij,I!J¥J,M\WlW:fli!D I Project Cost (!) V1ew larger map o gle K .py Kr TotalDebt (!) Revenue (!) GROUNDFLOOR HISTORY * HISTORICAL AVERAGES Completed Projects Average Project CONTAINED THEREIN IS HELPFUL,WEDO NOT USE IT AS THE SOLE BASIS FORA FUNDING DECISION. THE COMPANY PLAYED NO ROLE IN THE PREPARATION OF ANY OF THEVALUATIONSOURCES OR ANY OTHER MATERIALS PROVIDEDBY THE BORROWER WHILE WE BELIEVE THEDATA DFW INVESTMENT PROPERTIESFINANCIAL DATAPROJECTS / REVENUE ENTERPRISES, llC DATE OF FORMATION * 11/08/2020 Gross Margin% (!) PRINCIPAL Alfredo Goytia FOCUS Buy&Hold Loans Funded (!) Loans Repaid (!) PerYear (!)Revenue (!) IL. 11 JII6 II1II$149K On Time Average ProjectAverage Total Repayment (!) Time (!) Project Costs (!) 133.0%IL___1_1_m_o_nt_hs_ J I$106K reevea sending 2020 Report'"'gper'od:t 0.0% .•.120 PROJECT SPECIFIC RISK FACTORS • The Borrower was advanced the money it needed to purchase this property on March 11,2021by Groundfloor Finance Inc.("Groundfloor:·"we:· "us:·or "our") or a wholly-owned subsidiary of Groundfloor.The Borrower is now in possession of the property.If this offering is fully subscribed,Groundfloor will continue to administer and service the loan as further described in the Offering Circular. • The renovation of the property may be extensive,and therefore subject to delays and other unexpected issues. • The renovation willrequire permitting,and permits may not be obtained on time or may be denied. • The Borrower has not completed or sold any projects in the past year. As such, the Borrower's average revenue,costs,and margins cannot be calculated. • The borrower has had late repayments, but has repaid all loans in full,with all interest and fees due. • Please consult the Offering Circular for further discussion of general risk factors. CLOSING CONDITIONS • Loan is conditioned upon a clean title search and valid title insurance at the time of close. DEVELOPER FEES • GROUNDFLOOR generally charges borrowers between 2% and 6% of the principal amount of the loan for our services. • GROUNDFLOOR does not take a 'spread' on any part of the interest payments. • Developers may capitalize the cost of closing into the principalamount of their request.These closing costs typically range from $500 to $1500. • Unless otherwise limited by applicable law,GROUNDFLOOR will charge a penalty of 2% for any extension made to the borrower.See GROUNDFLOOR 'Fees and Expenses' in the Offering Circular SEC FILING INFORMATION • The series of LROs corresponding to this Project are offered pursuant to Post Qualification Amendment No.79 to the Offering Circular dated December 29,2017 (each. as amended and supplemented from time to time), including the documents incorporated by reference therein.You may access and review these documents on the InternalFilings Directory located on our Platform. PROPERTY DESCRIPTION "0': Address: 2416 KINGSTON STREET.ARLINGTON,TX 76015 "a.' W Arkansas Ln 2416 Kingston St, The Borrower intends to use the loan proceeds to purchase and renovate the property.Upon completion, the Arlington,TX 76015 Borrower intends to sell the property to repay the Groundfloor loan. Abr" > G Pl1n Map data ®2021 Terms of Use Report a map error Click here to view the LRO Agreement INVEST NOW As Complete (ARV) $231,000 Broker's Price Opinion Borrower Provided Appraisal Borrower Provided Comps After Value (ARV) (!) $231,000 TotalCosts (!)$173,960 0%----Skin-in-the-First Lien LoanCushion (!) Game (!) Purchase Price (!) $141,000 LoanToARV (!} 75.0% Purchase Date 03/11/2021Loan ToTotal 99.6% VALUATION REPORTS The following factors determine in part how the loan was graded: (in descendingorder of importance) LoanToARVScore (!) 10 Quality of Valuation Report4 Skin-in-the-Game (!) 010 Location8 Borrower Experience5 Borrower Commitment (!)1 GRADE FACTORS RateLoanToARV Loan Amount Investors BORROWERPurposeLoan Position TotalLoan Amount Repayment Terms c__ _ F_ir_s_tL_i_e_n _J] ] $ , EnterQrises.LLC _. . Alfredo Goytia-principal Click here to view the LRO Agreement INVEST NOW .---:-8-a.:....llo_o_n_p_a_y_m_e_n_t--p-ir-nc_i_p-al_a_n_d-in_t_e-re-s---.t returned on repayment I due at maturity. Purchase & Renovation

 

 PS-989 

 

 

 

 

- Skin-in-the-Game G) 10 Project Cost Address: 132 J Y CARMICHAEL RD,NEWNAN,GA 30277 Blossman Propane ft View larger map The Borrower intends to use the l oan proceeds to purchase and renovate the property. Upon compl etion,the Borrower intends to sellthe property to repay the Groundfloor loan. Click here to view the LRO Agreement Map data ®2021 Terms of Use Report a map error ' Revenue ® Brian Henderson Compl eted Projects Average Project CONTAINED THEREIN IS HELPFUL.WE DO NOT USE IT AS THE SOLE BASISFORA FUNDING DECISION. THECOMPANYPLAYED NO ROLE IN THE PREPARATIONOF ANYOF THE VALUATION SOURCES OR ANY OTHERMATERIALS PROVIDED BYTHE BORROWER.WHILE WE BELIEVETHE DATA * 'INFORMATIONBELOW IS SUPPLIED BY THE BORROWER AND ISNOT VERIFIED. BORROWERS REPRESENTAND WARRANT THAT INFORMATION SUPPLIED IS ACCURATE. CAPITAL GAIN & ASSET INVESTMENTS FINANCIAL DATA PROJECTS / REVENUE GROUP,LLC DATE OF FORMATION * 05/23/2014 Gross Margin% ® IPRINCIPALGROUNDFLOOR HISTORY *HISTORICAL AVERAGES FOCUS Fix & Fiip Loans Funded G)Loans Repaid G)PerYear G)Revenue ® Ll1,11°II 1II $147K On TimeAverage ProjectAverage Total Repayment ® Time G)Project Costs G) 10.0% Ll _ 9_m_o_nt_hs___,II$90K Reportingperiod:three years ending 2020 40.0% $175K Reportingperiod:2020 Reportingdate:12/31/20 UNLESSNOTED WITHA BORROWER SUMMARY I PROJECT SPECIFIC RISK FACTORS • The Borrower was advanced the money it needed to purchase this property on March 15,2021by Groundfloor Finance Inc.("Groundfloor," "w e "us or "our") or a wholly-owned subsidiary of Groundfloor. The Borrower is now in possession of the property.If this offering is fully subscribed,Groundfloor will continue to administer and service the l oan as further described in the Offering Circular. • The renovation of the property may be extensive,and therefore subject to delays and other unexpected issues. • The renovation will require permitting,and permits may not be obtained on time or may be denied. • Please consult the Offering Circul ar for further discussion of general risk factors. CLOSING CONOITIONS • Loan is conditioned upon a clean title search and valid title insurance at the time of close. DEVELOPER FEES • GROUNDFLOOR generally charges borrowers between 2% and 6% of the principal amount of the l oan for our services. • GROUNDFLOOR does not take a 'spread' on any part of the interest payments. • Developers may capitalize the cost of closing into the principal amount of their request.These closing costs typically range from $500 to $1500. • Unless otherwise limited by applicable l aw,GROUNDFLOOR will charge a penalty of 2% for any extension made to the borrower. See GROUNDFLOOR 'Fees and Expenses' in the Offering Circular SEC FILING INFORMATION • The seri es of LROs corresponding to this Project are offered pursuant to Post Qualification Amendment No. 79 to the Offering Circular dated December 29,2017 (each,as amended and supplemented from time to time),including the documents incorporated by reference therein. You may access and review these documents on the Internal Filings Directory located on our Platform. MISCELLANEOUS l Gas & Appli ance T ' Go gle INVEST NOW PROPERTY DESCRIPTION As Complete (ARV) $260,000 Broker's Price Opinion Borrower Provided Appraisal Borrower Provided Comps After $260,000 TotalCosts$215,910 $33,000 0% Skin-in-theFirst lien Loan Cushion G) Game G) Purchase Price$124,500Loan ToARV70.4% Purchase Date03/15/2021Loan To Total84.2% G) {2) G) VALUATION REPORTS The following factors determine in part how the loan was graded: (in descendingorder of importance) Loan To ARV Score G) 10 Quality of Valuation Report4 location8 Borrower Experience5 Borrower Commitment ® 1 GRADE FACTORS FINANCIAL OVERVIEW Rate Projected Termloan ToARV loan Amount Investors BORROWER Purpose loan Position Total oan AmountRepayment Terms CaRitaIGai n & Asset'---F-i_rs_t_L_ie_n _,ll $182,910 Investments Groufl, LLC Brian Henderson - principal Click here to view the LRO Agreement INVEST NOW Purchase & Renovation Balloon payment-principaland interest returned on repayment/ due at maturity.

 

 PS-990 

 

 

 

 

8 , r-B-'a"'-ll_oo_n pa_y_m_en-t --p--r in_c_i_pal_a_n_d_i_nte_r_e_s-t-, . . returned on repayment!due at maturity. Glenn Connelly - principal FINANCIAL OVERVIEW Project Cost PROPERTY DESCRIPTION Address: 10622 AKERS DRIVE NORTH,JACKSONVILLE,FL 32225 The Borrower intends to use the loan proceeds to purchase and renovate the property. Upon completion,the 5 i • '.1AkotSDrS 9craig c·M d.ata.,®.. 202i Terms of Use R eport a map error Click here to view the LRO Agreement Lone Sta r Rd MISCELLANEOUS BORROWER SUMMARY BORROWERS REPRESENTAND WARRANT THAT INFORMATION SUPPLIED IS ACCURATE. GROUNDFLOOR HISTORY * HISTORICAL AVERAGES Glenn Connelly Compl eted Projects Average Project ° II L,l _ ----'11 CONTAINEDTHEREIN IS HELPFUL,WE DONOT USE IT AS THE SOLE BASISFOR A FUNDING DECISION. THECOMPANYPLAYED NO ROLE IN THE PREPARATIONOF ANY OF THE VALUATION SOURCES OR ANY OTHERMATERIALS PROVIDED BYTHE BORROWER.WHILE WE BELIEVE THE DATA GNC HOMES LLC FINANCIAL DATAPROJECTS IREVENUE DATE OF FORMATION * 02/17/2021 Gross Margin% <:!) IPRINCIPAL FOCUS Single FamilyLoans Funded <:!)Loans Repaid <:!)PerYear <:!)Revenue <:!> 13 II$246.6K On TimeAverage Project Average Total Repayment <:!)Time <:!)Project Costs <:!) 10.0%_Ll _3_m_o_n_th_s _--'ll$184K Reportingperiod:three years ending2020 0.0% Reportingperiod:2020 Reportingdate:12/31/20 UNLESSNOTED WITHA * 'INFORMATIONBELOW IS SUPPLIED BY THE BORROWERAND ISNOT VERIFIED. PROJECT SPECIFIC RISK FACTORS o The Borrower was advanced the money it needed to purchase this property on February 26,2021by Groundfloor Finance Inc.("Groundfloor;'"we;'"us;·or "our") or a wholly-owned subsidiary of Groundfloor.The Borrower is now in possession of the property. If this offering is fully subscribed,Groundfloor willcontinue to administer and service the loan as further described in the Offering Circular. o The renovation of the property may be extensive,and therefore subject to delays and other unexpected issues. o The renovation will require permitting,and permits may not be obtained on time or may be denied. o The Borrower has not completed or sold any projects in the past year.As such,the Borrower's average revenue,costs,and margins cannot be calculated. o Please consult the Offering Circul ar for further discussion of general risk factors. CLOSING CONOITIONS o Loan is conditioned upon a clean title search and valid title insurance at the time of close. DEVElOPER FEES o GROUNDFLOOR generally charges borrowers between 2% and 6% of the principal amount of the loan for our services. o GROUNDFLOOR does not take a 'spread' on any part of the interest payments. o Developers may capitalize the cost of closing into the principal amount of their request.These closing costs typically range from $500 to $1500. o Unless otherwise limited by applicable l aw,GROUNDFLOOR will charge a penalty of 2% for any extension made to the borrower. See GROUNDFLOOR 'Fees and Expenses' in the Offering Circular SEC FiliNG INFORMATION o The series of LROs corresponding to this Project are offered pursuant to Post Qualification Amendment No.79 to the Offering Circular dated December 29,2017 (each,as amended and supplemented from time to time),including the documents incorporated by reference therein. You may access and review these documents on the Internal Filings Directory located on our Platform. C8U$tyln View larger map 'Borrower intends to sellthe property to repay the Groundfloor loan. Bawk o r.G INVEST NOW " o--As Complete (ARV) $246,000 Broker's Price Opinion Borrower Provided Appraisal Borrower Provided Comps After Repair Value (ARV) <:!)$246,000 TotalProject Costs <:!)$189,250 $5,250 0%----Skin-in-the-First lien LoanCushion <:!) Game <:!) Purchase Price$169,900 Loan ToARV74.8% Purchase Date02/26/2021Loan To Total97.2% <:!) <:!) <:!) VALUATION REPORTS The followingfactors determine in part how the loan was graded: (in descending order of importance) loan To ARV Score <:!)10 Quality of Valuation Report4 Skin-in-the-Game <:!)II10 location8 Borrower Experience5 Borrower Commitment <:!)1 GRADE FACTORS RateloanToARVloan Amount Investors BORROWER Purposeloan Position Total oan AmountRepayment Terms GNC Homes LLC F_i_rs_t_L_ie_n JII $1 4 000 L Cli ck here to view the LRO Agreement INVEST NOW Pu rchase & Renovation

 

 PS-991 

 

 

 

 

1 4 550 L Ricky Thompson - principal FINANCIAL OVERVIEW - Skin-in-the Game Q) 10 $295,000 01/25/2021 Project Cost PROPERTY DESCRIPTION View larger map Park at r @) The Borrower intends to use the loan proceeds to purchase and renovate the property. Upon completion,the 0 o<:-"f s c•"'<? ly Dollar .... .....1.11S1 5\'f Click here to view the LRO Agreement MISCELLANEOUS BORROWER SUMMARY BORROWERS REPRESENTAND WARRANT THAT INFORMATION SUPPLIED IS ACCURATE. GROUNDFLOOR HISTORY * HISTORICAL AVERAGES Ricky Thompson Completed Projects Average Project II II ° 1-----'11 1 Ll $199.5K --'II 1 0.0% $140K CONTAINEDTHEREIN IS HELPFUL.WE DONOT USEIT AS THE SOLE BASISFOR A FUNDING DECISION. THECOMPANYPLAYED NO ROLE IN THE PREPARATIONOF ANYOF THE VALUATION SOURCES OR ANY OTHER MATERIALS PROVIDED BYTHE BORROWER.WHILE WE BELIEVE THE DATA INGLYN PROPERTIES, LLCFINANCIAL DATA PROJECTS I REVENUE DATE OF FORMATION * 11/07/2018 Gross Margin% Q) IPRINCIPAL FOCUS Fix &Fiip Loans Funded Q)Loans Repaid Q)PerYear Q)Revenue Q) On TimeAverage Project Average Total Repayment Q)Time Q)Project Costs Q) Ll _ 6_m_o_nt_hs_ Reporting period:three years ending 2020 0.0% Reporting period:2020 Reportingdate:12/31/20 UNLESSNOTED WITHA * ,INFORMATIONBELOW IS SUPPLIED BY THE BORROWER AND ISNOT VERIFIED. PROJECT SPECIFIC RISK FACTORS • The Borrower was advanced the money it needed to purchase this property on January 25,2021by Groundfloor Finance Inc.("Groundfloor "we "us';or "our") or a wholly-owned subsidiary of Groundfloor. The Borrower is now in possession of the property.If this offering is fully subscribed,Groundfloor will continue to administer and service the loan as further described in the Offering Circular. • The renovation of the property may be extensive,and therefore subject to delays and other unexpected issues. • The renovation will require permitting,and permits may not be obtained on time or may be denied. • The Borrower has not completed or sold any projects in the past year.As such,the Borrower's average revenue,costs, and margins cannot be calculated. • Please consult the OfferingCircular for further discussion of general risk factors. CLOSING CONOITIONS • Loan is conditioned upon a clean title search and valid title insurance at the time of close. DEVELOPER FEES • GROUNDFLOOR generally charges borrowers between 2% and 6% of the principal amount of the loan for our services. • GROUNDFLOOR does not take a 'spread' on any part of the interest payments. • Developers may capitalize the cost of closing into the principal amount of their request.These closing costs typically range from $500 to $1500. • Unless otherwise limited by applicable law,GROUNDFLOOR will charge a penalty of 2% for any extension made to the borrower. See GROUNDFLOOR 'Fees and Expenses' in the OfferingCircular SEC FILING INFORMATION • The series of LROs corresponding to this Project are offered pursuant to Post Qualification Amendment No.79 to the OfferingCircular dated December 29,2017 (each,as amended and supplemented from time to time),including the documents incorporated by reference therein. You may access and review these documents on the Internal Filings Directory located on our Platform. James OrangeAddress: 1258 CAMPBELLTON ROAD SOUTHWEST,ATLANTA,GA 30310 .)akland CityOil\ Ave sv QJ Oakland City .Borrower intends to sell the property to repay the Groundfloor loan. ..,s » l Go gle Map data ®2021 Terms of Use R eport a map error "\ INVEST NOW As Complete (ARV) Broker's Price Opinion Borrower Provided Appraisal Borrower Provided Comps $295,000 TotalProject Costs Q)$217,350 $32,800 0% Skin-in-theFirst li en LoanCushion Q) Game Q) Purchase Price $78,000Loan ToARV 62.6% Purchase Date Loan To Total84.3% Q) Q) Q) VALUATION REPORTS The followingfactors determine in part how the loan was graded: (in descendingorder of importance) Loan To ARV Score Q)10 Quality of Valuation Report 4 location 8 Borrower Experience5 Borrower Commitment Q)1 GRADE FACTORS Rate Projected Term loan ToARV loan AmountInvestors Purposeloan PositionTotal loan Amount Repayment Terms F_i_rs_t_L_ie_n ,l I $ 8 , ;.=B:a..":-11oc..:o.:.:.n.:..p..:..a::c.cy..m::.::..e_n__t -p_ -r inc_i_p_al_a_n_d_i_nte_r_e_s-t-, BORROWER . . returned on repayment/ due at maturity. lngt)!:n ProQerties,LLC Click here to view the LRO Agreement INVEST NOW Purchase & Renovation

 

 PS-992 

 

 

 

 

1 7 720 urity. - Borrower Experience 5 Game (2) Project Cost View larger map !<' The Borrower intends to use the loan proceeds to complete a new construction.Upon completion,the and Recreation 1 courts Total Debt CD Revenue (2) Tamara Ware Huff Completed Projects Average Project 1 CONTAINEDTHEREIN IS HELPFUL.WE DO NOT USE IT AS THE SOLE BASISFORA FUNDING DECISION. THECOMPANYPLAYED NO ROLE IN THE PREPARATIONOF ANYOF THE VALUATION SOURCES OR ANY OTHER MATERIALS PROVIDED BY THE BORROWER.WHILE WE BELIEVE THE DATA BORROWERS REPRESENTAND WARRANT THAT INFORMATION SUPPLIED IS ACCURATE. WARE JCB INVESTMENTS,LLCFINANCIAL DATA PROJECTS / REVENUE DATE OF FORMATION * 01/25/2005 Gross Margin% CD IPRINCIPALGROUNDFLOOR HISTORY *HISTORICAL AVERAGES FOCUS New ConstructionLoans Funded CDLoans Repaid CDPer Year CDRevenue CD L---1_ ----'11°IIoII$O On TimeAverage Project Average Total Repayment CDTime (2) Project Costs (2) 10.0% L---1o months ---'II $0 Reportingperiod:three years ending 2020 0.0% Reportingperiod:2020 Reportingdate:12/31/20 UNLESSNOTEDWITHA * ,INFORMATIONBELOW IS SUPPLIED BY THE BORROWERAND ISNOT VERIFIED. BORROWER SUMMARY PROJECT SPECIFIC RISK FACTORS • The Borrower was advanced the money it needs to begin construction of this property on February 26,2021by Groundfloor Finance Inc.("Groundfloor;·"we·;"us·; or "our") or a wholly-owned subsidiary of Groundfloor. The Borrower has begun construction of the property.If this offeringis fully subscribed,Groundfloor will continue to administer and service the loan as further described in the OfferingCircular. • The construction of the property may be extensive,and therefore subject to delays and other unexpected issues. • The construction willrequire permitting, and permits may not be obtained on time or may be denied. • There is no existing structure on this property,or if there is,it will be demolished,and a new structure built in its place. • The event of default on one Groundfloor note secured by this property will trigger default on all Groundfloor notes secured by this property. All LRO holders investing in LROs corresponding to notes secured by this property share the same priority in any recovery and recovered proceeds will be distributed on a pro-rata basis. • The Borrower has not completed or sold any projects in the past year.As such,the Borrower's average revenue,costs,and margins cannot be calculated. • The Principal has not yet completed or sold any projects.As such,the Principal's average revenue,costs,and margins cannot be calculated. • Please consult the OfferingCircular for further discussion of general risk factors. CLOSING CONOITIONS • Loan is conditioned upon a clean title search and valid title insurance at the time of close. DEVELOPER FEES • GROUNDFLOOR generally charges borrowers between 2% and 6% of the principal amount of the loan for our services. • GROUNDFLOOR does not take a 'spread' on any part of the interest payments. • Developers may capitalize the cost of closing into the principal amount of their request.These closing costs typically range from $500 to $1500. • Unless otherwise limited by applicable law,GROUNDFLOOR will charge a penalty of 2% for any extension made to the borrower. See GROUNDFLOOR 'Fees and Expenses' in the OfferingCircular SEC FILING INFORMATION • The series of LROs corresponding to this Project are offered pursuant to Post Qualification Amendment No.79 to the OfferingCircular dated December 29,2017 (each,as amended and supplemented from time to time),including the documents incorporated by reference therein. You may access and review these documents on the Internal Filings Directory located on our Platform. MISCELLANEOUS PROPERTY PHOTOS Cascade Family SkatingC1Address: 128 NATHAN ROAD SW LOT 02, ATLANTA,GA 30331 <CT Martin Natal I Park " Borrower intends to sellthe property to repay the Groundfloor loan. Apa M.sp data ®2021 Terms of Use Report a map error Click here to view the LRO Agreement INVEST NOW PROPERTY DESCRIPTION As Complete (ARV) $270,000 Broker's Price Opinion Borrower Provided Appraisal Borrower Provided Camps After RepairValue (ARV) CD$270,000 $34,480 TotalCosts$235,520 0%----Skin-in-the-First li en LoanCushion CD Purchase Price $40,000 Loan To ARV 69.5% Purchase Date 04/19/2019Loan To Total78.9% CD {2) CD VALUATION REPORTS The followingfactors determine in part how the loan was graded: (in descending order of importance) Loan To ARV Score CD10 Quality of ValuationReport 4 Skin-in-the-Game CD 10 location8 Borrower Commitment CD1 GRADE FACTORS FINANCIAL OVERVIEW PROJECT SUMMARY I 128 NATHAN ROAD SW LOT 02, ATLANTA, GA 30331 Rate Projected Term oan ToARV loan AmountInvestors Purposeloan PositionTotal oan Amount Repayment Terms ,__ F_i_rs_t_L_ie_n ,l I $ 8 , ;..B=:a..-:1'1-o'.:.:o.=..::n.:..p..:.:a.:y.:.:m.:.::.e._n_-t--p-rin_c_i_p_al_a_n_d_i_nte_ _ . . returned on repayment/ due at mat BORROWER WARE JCB INVESTMENTS, LLC Click here to view the LRO Agreement Tamara Ware Huff-principal r_e_s-t-, INVEST NOW New Construction

 

 PS-993 

 

 

 

 

193 740 ------------------------------------------------------------03/12/2021 Project Cost (!} uraiY Tw1nOakaln Value of Properties (!) TotalDebt (!) Completed Projects (!) Revenue (!) GROUNDFLOOR HISTORY * HISTORICAL AVERAGES Completed Projects Average Project I. 2_11 II 1 1 II $397.SK 1 100.0% IL 8_m_on_th_s_--'ll $310K CONTAINED THEREINIS HELPFuL.WE DONOT USE IT AS THE SOLE BASIS FORA FUNDING DECISION. THE COMPANY PLAYED NO ROLE IN THE PREPARATION OF ANY OF THE VALUATION SOuRCES OR ANY OTHER MATERIALS PROVIDED BY THE BORROWER. WHILE WE BELIEVE THE DATA * BORROWERS REPRESENT AND WARRANT THAT INFORMATION SUPPLIED IS ACCURATE. ZYKINVEST, INC.FINANCIAL DATAPROJECTS/REVENUE Rrt 1R t DATE OF FORMATION * 11/14/2018 Gross Margin% (!) PRINCIPAL Christoph Dlugaiczyk FOCUS Fix&FiipLoans Funded (!) Loans Repaid (!) PerYear (!) Revenue (!) On Time Average ProjectAverage Total Repayment (!) Time (!) Project Costs (!) Report:ng per'od:three years ending 2020 8.0% $325K ) •() /20 ,INFORMATION BELOW IS SUPPLIED BY THE BORROWER ANDIS NOT VERIFIED. UNLESS NOTEDWI TH A BORROWER SUMMARY MI SCELLANEOUS PROJECT SPECIFIC RISK FACTORS • The Borrower was advanced the money it needed to purchase this property on March 12,2021by Groundfloor Finance Inc.("Groundfloor;·"we;·"us;·or "our") or a wholly-owned subsidiary of Groundfloor.The Borrower is now in possession of the property.If this offering is fully subscribed,Groundfloor will continue to administer and service the loan as further described in the Offering Circular. • The renovation of the property may be extensive,and therefore subject to delays and other unexpected issues. • The renovation will require permitting,and permits may not be obtained on time or may be denied. • Please consult the Offering Circular for further discussion of general risk factors. CLOSING CONDITIONS • Loan is conditioned upon a clean title search and valid title insurance at the time of close. DEVELOPER FEES • GROUNDFLOOR generally charges borrowers between 2% and 6% of the principal amount of the loan for our services. • GROUNDFLOOR does not take a 'spread' on any part of the interest payments. • Developers may capitalize the cost of closing into the principal amount of their request. These closing costs typically range from $500 to $1500. • Unless otherwise limited by applicable law.GROUNDFLOOR will charge a penalty of 2% for any extension made to the borrower.See GROUNDFLOOR 'Fees and Expenses' in the Offering Circular SEC FILING INFORMATION • The series of LROs corresponding to this Project are offered pursuant to Post Qualification Amendment No.79 to the Offering Circular dated December 29,2017 (each,as amended and supplemented from time to time).including the documents incorporated by reference therein. You may access and review these documents on the InternalFilings Directory located on our Platform. PROPERTY DESCRIPTION View larger mapAddress: 550 MEADOWVALE DR,ORLANDO,FL 32825 The Borrower intends to use the loan proceeds to purchase and renovate the property.Upon completion, the tVuCI Borrower intends to sell the property to repay the Groundfloor loan. Jane Eyre Or Go gle BloomfieldMap data C2021 Terms of Use Click here to view the LRO Agreement INVEST NOW As Complete (ARV) $278,000 Broker's Price Opinion Borrower Provided Appraisal Borrower Provided Comps VALUATION REPORTS The following factors determine in part how the loan was graded: (in descendingorder of importance) LoanToARVScore (!) 10 Quality of Valuation Report 4 Skin-in-the-Game (!) 10 Location8 Borrower Experience5 Borrower Commitment (!) 1 GRADEFACTORS FINANCIAL OVERVIEW $278,000 Total Project Costs (!) $244,740 0% ----Skin-in-the First Lien LoanCushion (!) Game (!) Purchase Price (!} $180,000LoanToARV (!} 69.7% Purchase DateLoan To Total78.6% RateProjected TermLoanToARV Loan Amount Investors PurposeLoan Position Total Loan Amount Repayment Terms BORROWER F_ri_st_L_i_e_n_, I $, Zv.kinvest,lnc.'-. . Christoph Dlugaiczyk-principal Click here to view the LRO Agreement INVEST NOW r--'-8-al-'--lo_o_n_p_a_y_m_e_n_t-_-p-ri-nc-i-pa_l_a_n_d_ni -t-e-re_s ,t returned on repayment I due at maturity. Purchase & Renovation

 

 PS-994 

 

 

 

 

Define Reai!.Y. LLC 211240 ------------------------------------------------------------Project Cost Vi ew larger map Mason Park intends to sell the property to repay the Groundfloor loan. Click here to view the LRO Agreement Map data ©2021 Terms of Use TotalDebt (!) Revenue (!) HISTORICAL AVERAGES GROUNDFLOOR HISTORY * Aaron Najera Completed Projects Average Project ]...._1 .11 II $O I I o 0 I...._N/.----' II 0.0% 1 $0 PFUL,WE DO NOT USE T AS THE SOLE BASIS FORA FUNDING DECISION THE COMPA"'Y PlAYED NO ROLE IN THE PREPARATION OF ANY OF THEVALUATIONSOURCES OR ANY OTHER MATERIALS PROVIDEDBY THE BORROWER. WHILE WE BELIEVE THE DATA CONTAINED THEREIN IS HEL DEFINE REAlTY llCFINANCIAL DATAPROJECTSI REVENUE DATE OF FORMATION * 10/31/2018 Gross Margin% (!) PRINCIPAL e FOCUS New Construction Loans Funded (!) Loans Repaid (!) PerYear (!) Revenue (!) On Time Average ProjectAverage Total Repayment (!) Time (!) Project Costs (!) sending 2020 0.0% /20 PROJECT SPECIFIC RISK FACTORS • The Borrower was advanced the money it needed to begin renovation of this property on March 1,2021by Groundfloor Finance Inc.("Groundfloor'; "we:·"us:·or "our") or a wholly-owned subsidiary of Groundfloor.The Borrower has now begun renovation of the property.If this offering is fully subscribed,Groundfloor will continue to administer and service the loan as further described in the Offering Circular. • The renovation of the property may be extensive,and therefore subject to delays and other unexpected issues. • The renovation will require permitting,and permits may not be obtained on time or may be denied. • The Borrower has not completed or sold any projects in the past year. As such.the Borrower's average revenue, costs,and margins cannot be calculated. • The Principalhas not yet completed or sold any projects.As such,the Principal's average revenue,costs,and margins cannot be calculated. • The Borrower is using $211,240 of the loan proceeds to pay off an existing loan that was used to acquire the property.Groundfloor will assume the first lien position.The rest of the loan proceeds willbe put towards the renovation of the property, much like an acquisition and renovation loan. • Please consult the Offering Circular for further discussion of general risk factors. CLOSING CONDITIONS • Loan is conditioned upon a clean title search and valid title insurance at the time of close. DEVELOPER FEES • GROUNDFLOOR generally charges borrowers between 2% and 6% of the principal amount of the loan for our services. • GROUNDFLOOR does not take a 'spread' on any part of the interest payments. • Developers may capitalize the cost of closing into the principalamount of their request.These closing costs typically range from $500 to $1500. • Unless otherwise limited by applicable law,GROUNDFLOOR will charge a penalty of 2% for any extension made to the borrower.See GROUNDFLOOR 'Fees and Expenses' in the Offering Circular SEC FILING INFORMATION • The series of LROs corresponding to this Project are offered pursuant to Post Qualification Amendment No.79 to the Offering Circular dated December 29,2017 (each,as amended and supplemented from time to time), including the documents incorporated by reference therein.You may access and review these documents on the InternalFilings Directory located on our Platform. PROPERTY DESCRIPTION Address: 7327 SANTIAGO STREET,HOUSTON,TX 77023 The Borrower intends to use the loan proceeds to renovate the property.Upon completion, the Borrower s INVEST NOW As Complete (ARV) $340,000 Broker's Price Opinion Borrower Provided Appraisal Borrower Provided Comps Certified Independent Appraisal VAlUATION REPORTS The following factors determine in part how the loan was graded: (in descendingorder of importance) LoanToARVScore (!) 10 Quality of Valuation Report4 Skin-in-the-Game (!) 10 Location8 Borrower Experience5 Borrower Commitment (!)1 GRADE FACTORS FINANCIAlOVERVIEW After Repair Value (ARV) (!) $340,000 TotalProject Costs (!) $238,240 0% ----Skin-in-the First Lien LoanCushion(!) Game(!) Purchase Price $212,000 LoanToARV 62.1% Purchase Date 02/12/2021Loan ToTotal 88.4% RateProjected TermLoanToARV Loan Amount Investors BORROWER PurposeLoan Position TotalLoan Amount Repayment Terms L _ F_ir_st_L_i_en_ J]] $ , Aaron Najera-principal_ . . Click here to view the LRO Agreement INVEST NOW .--'8a.l:.l_o_o_n_p_a_y_m_e_n_t - pr-in-c_i_pa-l_a_n_d-in_t_ere-s---,t returned on repayment I due at maturity. Refinance Rehab

 

 PS-995 

 

 

 

 

BORROWER Purpose Loan Position Total Loan Amount Repayment Terms $ 214 850 _ . . Aaron Najera - principal ------------------------------------------------------------Project Cost intends to sell the property to repay the Groundfloor loan. Mason Park ' :(r-/>) _ :-:--=-Go _gle _ Value of Properties (!) Total Debt (!) Completed Projects (!) Revenue (!) GROUNDFLOOR HISTORY * HISTORICAL AVERAGES Aaron Najera Completed Projects Average Project II II 1'-1_11 ° o $O 1 '-Nl II 0.0% 1 $0 CONTAINED THEREIN IS HELPFUL,WE DO NOTUSE IT AS THE SOLEBASIS FOR A FUNDING DECISION. THE COMPANY PLAYEDNO ROLE IN THE PREPARATION OF ANY OF THE VALUATION SOURCES OR ANY OTHER MATERIALS PROVIDED BY THE BORROWER.WHILE WEBELIEVE THE DATA DEFINE REALTY LLC FINANCIAL DATAPROJECTS/ REVENUE DATE OF FORMATION * 10/31/2018 Unsold Inventory (!) Aged Inventory (!) Gross Margin% (!) PRINCIPAL FOCUS New ConstructionLoans Funded (!) Loans Repaid (!) Per Year (!) Revenue (!) On TimeAverage Project Average Total Repayment (!) Time (!) Project Costs (!) Reportmg period: three years ending 2020 0.0% Repo ting penod:2020 Reportrngdate:12/31/20 PROJECT SPECIFIC RISK FACTORS • The Borrower was advanced the money it needed to begin renovation of this property on March 1, 2021by Groundfloor Finance Inc.("Groundfloor;'"we;'"us;' or "our") or a wholly-owned subsidiary of Groundfloor. The Borrower has now begun renovation of the property. If this offering is fully subscribed,Groundfloor will continue to administer and service the loan as further described in the Offering Circular. • The renovation of the property may be extensive,and therefore subject to delays and other unexpected issues. • The renovation will require permitting,and permits may not be obtained on time or may be denied. • The Borrower has not completed or sold any projects in the past year. As such, the Borrower's average revenue,costs,and margins cannot be calculated. • The Principal has not yet completed or sold any projects. As such, the Principal's average revenue,costs,and margins cannot be calculated. • The Borrower is using $202,991of the loan proceeds to pay off an existing loan that was used to acquire the proper ty.Groundfloor will assume the fir st lien position.The rest of the loan proceeds will be put towards the renovation of the property,much like an acquisition and renovation loan. • Please consult the Offering Circular for further discussion of general risk factors. CLOSING CONDITIONS • Loan is conditioned upon a clean title search and valid title insurance at the time of close. DEVELOPER FEES • GROUNDFLOOR generally charges borrowers between 2% and 6% of the principal amount of the loan for our services. • GROUNDFLOOR does not take a 'spr ead' on any part of the interest payments. • Developers may capitalize the cost of closing into the principal amount of their request. These closing costs typically range from $500 to $1500. • Unless otherwise limited by applicable law,GROUNDFLOOR will charge a penalty of 2% for any extension made to the borrower. See GROUNDFLOOR 'Fees and Expenses' in the Offering Circular SEC FILING INFORMATION • The series of LROs corresponding to this Project are offered pursuant to Post Qualification Amendment No. 79 to the Offering Circular dated December 29,2017 (each,as amended and supplemented from time to time), including the documents incorporated by reference therein. You may access and review these documents on the InternalFilings Directory located on our Platform. I PROPERTY DESCR IPTION View larger mapAddress: 7325 SANTIAGO STREET, HOUSTON, TX 77023 I The Borrower intends to use the loan proceeds to renovate the proper ty.Upon completion, the Borrower "' &; ... Map data ©2021 Terms of Use Click here to view the LRO Agreement "'c.p,: g I INVEST NOW As Complete (ARV) $375,000 Broker's Price Opinion Borrower Provided Appraisal Borrower Provided Comps ... • ... VALUATION REPORTS The following factors determine in part how the loan was graded: (in descending order of importance) Loan ToARV Score (!) 10 Quality of Valuation Report4 Skin-in-the-Game (!) 10 Location8 Borrower Experience5 Borrower Commitment (!)1 GRADEFACTORS FINANCIAL OVERVIEW After Repair Value (ARV) (!) $375,000 Total Project Costs (!) $242,850 0% ----Skin-in-theFirst Lien LoanCushion (!) Game (!) Purchase Price$210,000Loan To ARV57.3% Loan To Total Purchase Date02/26/2021 88.2% (!) {!) (!) RateProjected TermLoan ToARVLoan AmountInvestors Define RealtY. LLC L _F_ir_st_L_i_en_---'II,, Click here to view the LRO Agreement INVEST NOW ,-B-:.al-l'-o_o_n_p_a_y_m_e_n_t _-p-rinc-ipa_l_a_n_d_in-tere-s-t--returned on repayment I due at maturity. Refinance Rehab

 

 PS-996 

 

 

 

Rate loan ToARV loan Amount Investors 6 815 BORROWER . . retu rned on repayme nt/ due at matu rity. I FINANCIAL OVERVIEW ' I Project Cost PROPERTY DESCRIPTION Address: 2301N DECATUR ROAD #1,DECATUR, GA30033 lr ., ."'"'""'\ z The Borrower intends to use the l oan proceeds to purchase and renovate the property. Upon completion,the Click here to view the LRO Agreement Map data ®2021 Terms of Use MISCELLANEOUS BORROWER SUMMARY UNLESSNOTEDWITHA * ,INFORMATIONBELOW IS SUPPLIED BY THE BORROWERAND ISNOT VERIFIED. BORROWERS REPRESENTAND WARRANT THAT INFORMATION SUPPLIED IS ACCURATE. GROUNDFLOOR HISTORY * HISTORICAL AVERAGES Brenda Wyatt Compl eted Projects Average Project ° II L,l _ ----'11 CONTAINEDTHEREIN IS HELPFUL,WE DO NOT USE IT AS THE SOLE BASISFORA FUNDING DECISION. THECOMPANYPLAYED NO ROLE IN THE PREPARATIONOF ANYOFTHE VALUATION SOURCES OR ANY OTHERMATERIALS PROVIDED BYTHE BORROWER.WHILE WE BELIEVE THE DATA GA GROWTH 1714671 2301 N DECATURFINANCIAL DATAPROJECTS / REVENUE RO LLC DATE OF FORMATION * 02/26/2021 Gross Margin% (!) IPRINCIPAL FOCUS Fix & Fiip Loans Funded (!)Loans Repaid (!)PerYear (!)Revenue (!) 12 II$388K On TimeAverage Project Average Total Repayment (!) Time (!) Project Costs (!) 10.0% _Ll _5_m_o_n_th_s _--'ll$270K Reportingperiod:three years ending 2020 0.0% Reportingperiod:2020 Reportingdate:12/31/20 PROJECT SPECIFIC RISK FACTORS o The Borrower was advanced the money it needed to purchase thi s property on March 15,2021by Groundfloor Finance Inc.("Groundfloor "w e "us or "our") or a wholly-owned subsidiary of Groundfloor. The Borrower is now in possession of the property.If this offering is fully subscribed,Groundfloor will continue to administer and service the loan as further described in the Offering Circular. o The renovation of the property may be extensive,and therefore subject to delays and other unexpected i ssues. o The renovation will require permitting,and permits may not be obtained on time or may be denied. o This loan represents the first draw for the construction project and is secured by an individual note. o Each draw on this project i s structured as an individual loan.We will fund each draw from our own capital or credit facilities as and when requested by the Borrower,provided conditi ons for each draw are met as described in our Offering Circular.Once a draw has been approved and funded,we will then sellthe corresponding seri es of LROs on our platform,each of which will be due 12 months from the time such seri es of LRO i s deemed issued,as described in our Offering Circular.Subsequent draws are expected to be requested every two months from the date we advanced the first draw,but may be requested sooner,or later, depending on the progress of constructi on. o There will be multiple l oans on this project, each representing subsequent draws. The loans will range from $200,000 to $250,000.The Financial Overvi ew box represents the aggregate amount of all loans to be secured by this property,giving a complete financial pi cture of the project. o The event of default on one Groundfloor note secured by this property will tri gger default on all Groundfloor notes secured by this property. All LRO holders investingin LROs corresponding to notes secured by this property share the same priority in any recovery and recovered proceeds will be distributed on a pro-rata basis. o The Borrower has not completed or sold any projects in the past year.As such,the Borrower's average revenue,costs,and margins cannot be calculated. o Please consult the Off ering Circular for further discussion of general ri sk factors. CLOSING CONDITIONS o Loan is conditioned upon a clean title search and valid title insurance at the time of close. DEVElOPER FEES o GROUNDFLOOR generally charges borrowers between 2% and 6% of the principal amount of the l oan for our services. o GROUNDFLOOR does not take a 'spread' on any part of the interest payments. o Developers may capitalize the cost of closing into the principal amount of their request.These closing costs typically range from $500 to $1500. o Unless otherwise limited by applicable l aw,GROUNDFLOOR will charge a penalty of 2% for any extension made to the borrower. See GROUNDFLOOR 'Fees and Expenses' in the Offer ng Circular SEC FILING INFORMATION o The series of LROs corresponding to this Project are offered pursuant to Post Qualification Amendment No. 79 to the Offering Circular dated December 29,2017 (each,as amended and supplemented from time to time),including the documents incorporated by reference therein. You may access and review these documents on the Internal Filings Directory located on our Platform. l'ft:l ll ew larger map Po--11tn$Borrower intends to sellthe property to repay the Groundfloor loan. ecatur fGo"'gle INVEST NOW Vi i !1 As Compl ete (ARV) $750,000 Broker's Price Opinion Borrower Provided Appraisal Borrower Provided Comps After RepairValue (ARV) (!) $750,000 TotalCosts $603,630 Skin-in-theFirst lien Loan Cushion (!) Game (!) Purchase Price $305,000 Loan To ARV60.5% Purchase Date03/15/2021Loan To Total74.3% (!) (2} (!) VALUATION REPORTS 0%----GRADE FACTORS The followingfactors determine in part how the loan was graded: (in descending order of importance) Loan To ARV Score (!) 10 Quality of ValuationReport 4 Skin-in-the-Game (!)10 location8 Borrower Experience5 Borrower Commitment (!)1 Purpose loan Position Total oan Amount Repayment Terms F_i_rs_t_L_ie_n JII $22 , r--'Ba.-l:.l..o_o_n pa_y_m_en-t --p-r-in_c_i_pal_a_n_d_i_n-et_r_e_s-t-, L GA GROWTH 17146712301N Decatur Rd LLC Brenda Wyatt - principal Cli ck here to view the LRO Agreement INVEST NOW Pu rchase & Renovation

 

 PS-997 

 

 

 

 

Investors Rate loan ToARV loan Amount 6 815 BORROWER . . returned on repayment/ due at maturity. FINANCIAL OVERVIEW Game CD Project Cost PROPERTY DESCRIPTION Click here to view the LRO Agreement ;; Map data ®2021 Terms of Use Report a map error MISCELLANEOUS BORROWER SUMMARY UNLESSNOTEDWITHA 'INFORMATIONBELOW ISSUPPLIEDBYTHE BORROWERAND ISNOT VERIFIED. BORROWERS REPRESENTAND WARRANT THAT INFORMATION SUPPLIED IS ACCURATE. GROUNDFLOOR HISTORY * HISTORICAL AVERAGES Brenda Wyatt Completed ProjectsAverage Project II II ° 1------'11 2 Ll $388K --'II 1 0.0% $270K CONTAINEDTHEREIN IS HELPFUL,WE DO NOT USE IT AS THE SOLE BASIS FORA FUNDING DECISION. THECOMPANYPLAYED NO ROLE IN THE PREPARATIONOF ANYOF THE VALUATION SOURCESOR ANY OTHER MATERIALS PROVIDED BYTHE BORROWER.WHILE WE BELIEVE THE DATA GA GROWTH 1714671 2301 N DECATUR FINANCIAL DATA PROJECTS I REVENUE RO LLC DATE OF FORMATION * 02/26/2021 Gross Margin% CD IPRINCIPAL FOCUS Fix & Fiip Loans Funded CDLoans Repaid CDPerYear CDRevenue CD On TimeAverage Project Average Total Repayment CDTime CDProject Costs CD Ll _ 5_m_o_nt_hs_ Reportingperiod:three years ending 2020 0.0% Reportingperiod:2020 Reportingdate:12/31/20 PROJECT SPECIFIC RISK FACTORS • The Borrower was advanced the money it needed to purchase this property on March 15,2021by Groundfloor Finance Inc.("Groundfloor "w e "us or "our") or a wholly-owned subsidiary of Groundfloor. The Borrower is now in possession of the property.If this offering is fully subscribed,Groundfloor will continue to administer and service the loan as further described in the Offering Circular. • The renovation of the property may be extensive,and therefore subject to delays and other unexpected issues. • The renovation will require permitting,and permits may not be obtained on time or may be denied. • This loan represents the second draw for the construction project and is secured by an individual note. • Each draw on this project is structured as an individual loan.We will fund each draw from our own capital or credit facilities as and when requested by the Borrower,provided conditions for each draw are met as described in our Offering Circular.Once a draw has been approved and funded,we will then sell the corresponding series of LROs on our platform,each of which will be due 12 months from the time such series of LRO is deemed issued,as described in our Offering Circular.Subsequent draws are expected to be requested every two months from the date we advanced the first draw,but may be requested sooner,or later, depending on the progress of construction. • There will be multiple loans on this project,each representing subsequent draws. The loans will range from $200,000 to $250,000.The Financial Overview box represents the aggregate amount of all loans to be secured by this property,giving a complete financial picture of the project. • The event of default on one Groundfloor note secured by this property will trigger default on all Groundfloor notes secured by this property. All LRO holders investing in LROs corresponding to notes secured by this property share the same priority in any recovery and recovered proceeds will be distributed on a pro-rata basis. • The Borrower has not completed or sold any projects in the past year.As such,the Borrower's average revenue,costs, and margins cannot be calculated. • Please consult the Offering Circular for further discussion of general risk factors. CLOSING CONDITIONS • Loan is conditioned upon a clean title search and valid title insurance at the time of close. DEVElOPER FEES • GROUNDFLOOR generally charges borrowers between 2% and 6% of the principal amount of the loan for our services. • GROUNDFLOOR does not take a 'spread' on any part of the interest payments. • Developers may capitalize the cost of closing into the principal amount of their request.These closing costs typically range from $500 to $1500. • Unless otherwise limited by applicable law,GROUNDFLOOR will charge a penalty of 2% for any extension made to the borrower. See GROUNDFLOOR 'Fees and Expenses' in the OfferingCircular SEC FILING INFORMATION • The series of LROs corresponding to this Project are offered pursuant to Post Qualification Amendment No.79 to the OfferingCircular dated December 29,2017 (each,as amended and supplemented from time to time),including the documents incorporated by reference therein. You may access and review these documents on the Internal Filings Directory located on our Platform. Address: 2301N DECATUR ROAD #2,DECATUR,GA30033 The Borrower intends to use the loan proceeds to purchase and renovate the property. Upon completion,the Borrower intends to sell the property to repay the Groundfloor loan. ecatur fGo gle INVEST NOW As Complete (ARV) $750,000 Broker's Price Opinion Borrower Provided Appraisal Borrower Provided Comps After RepairValue (ARV) CD$750,000 Total· Costs $603,630 0%----Skin-in-the-First li en Loan Cushion CD Purchase Price $305,000Loan To ARV 60.5% Purchase Date 03/15/2021Loan To Total74.3% CD CD CD VALUATION REPORTS The following factors determine in part how the loan was graded: (in descendingorder of importance) Loan To ARV Score CD10 Quality of ValuationReport4 Skin-in-the-Game CD 10 location8 Borrower Experience5 Borrower Commitment CD1 GRADE FACTORS Purpose loan Position Total oan Amount Repayment Terms F_i_rs_t_L_ie_n JII $22 , ,--:8a-..l:.l..o_o_n_p_ay_m_en__t-p_ -r inc_i_p_al_a_n_d_i_nte_r_e_s-t-, L GA GROWTH 17146712301N Decatur Rd LLC Brenda Wyatt - principal Click here to view the LRO Agreement INVEST NOW Purchase & Renovation

 

 PS-998 

 

 

 

 

9 740 BORROWER - Skin-in-the-Game Q) 10 Project Cost Address: 523 JOSEPH E.LOWERY BOULEVARD NORTHWEST, ATLANTA.GA 30314 View larger map C H E A D !:1 Lowery Blvd NW... i Borrower intends to sellthe property to repay the Groundfloor loan. Screen... Go '9le . , '·••• ••(.1) " '..,, !n •• Total Debt Q) Revenue Q) Warren Anderson Completed Projects Average Project ° II Ll _ -----'11 CONTAINEDTHEREIN IS HELPFUL.WE DONOT USE IT AS THE SOLE BASISFORA FUNDING DECISION. THECOMPANYPLAYED NO ROLE IN THE PREPARATION OF ANY OF THE VALUATION SOURCESOR ANY OTHER MATERIALS PROVIDED BY THE BORROWER.WHILE WE BELIEVE THE DATA BORROWERS REPRESENTAND WARRANT THAT INFORMATION SUPPLIED IS ACCURATE. PACIFIC HOLDINGS NORTHWEST, LLC FINANCIAL DATAPROJECTS IREVENUE DATE OF FORMATION * 10/29/2020 Gross Margin% Q) IPRINCIPALGROUNDFLOOR HISTORY *HISTORICAL AVERAGES FOCUS Single FamilyLoans Funded Q)Loans Repaid Q)PerYear Q) Revenue Q) 3 3 II $100K On TimeAverage ProjectAverage Total Repayment Q) Time Q)Project Costs Q) 10.0% _'-l _ 8m__on_th_s__,ll$75K Reporting period:three years ending 2020 0.0% Reporting period:2020 Reportingdate:12/31/20 UNLESSNOTED WITHA * 'INFORMATIONBELOW IS SUPPLIED BY THE BORROWER AND ISNOT VERIFIED. BORROWER SUMMARY PROJECT SPECIFIC RISK FACTORS o The Borrower was advanced the money it needed to purchase this property on March 12,2021by Groundfloor Finance Inc.("Groundfloor "we "us or "our") or a wholly-owned subsidiary of Groundfloor. The Borrower is now in possession of the property.If this offering is fully subscribed,Groundfloor will continue to administer and service the loan as further described in the Offering Circular. o The renovation of the property may be extensive,and therefore subject to delays and other unexpected issues. o The renovation will require permitting,and permits may not be obtained on time or may be denied. o The Borrower has not completed or sold any projects in the past year.As such,the Borrower's average revenue,costs,and margins cannot be calculated. o Please consult the OfferingCircular for further discussion of general risk factors. CLOSING CONOITIONS o Loan is conditioned upon a clean title search and valid title insurance at the time of close. DEVELOPER FEES o GROUNDFLOOR generally charges borrowers between 2% and 6% of the principal amount of the loan for our services. o GROUNDFLOOR does not take a 'spread' on any part of the interest payments. o Developers may capitalize the cost of closing into the principal amount of their request.These closing costs typically range from $500 to $1500. o Unless otherwise limited by applicable law,GROUNDFLOOR will charge a penalty of 2% for any extension made to the borrower. See GROUNDFLOOR 'Fees and Expenses' in the OfferingCircular SEC FILING INFORMATION o The series of LROs corresponding to this Project are offered pursuant to Post Qualification Amendment No.79 to the OfferingCircular dated December 29,2017 (each,as amended and supplemented from time to time),including the documents incorporated by reference therein.You may access and review these documents on the Internal Filings Directory located on our Platform. MISCELLANEOUS a ll c:IIJ IVlU:SI (.; IVI U t:!U I Pelham$!NW ,523 Joseph E. The Borrower intends to use the loan proceeds to purchase and renovate the property. Upon completion,the >air" Jett St N\V Map data ®2021 Goog!e Terms of Use Report a map error Click here to view the LRO Agreement INVEST NOW PROPERTY DESCRIPTION As Complete (ARV) $349,000 Broker's Price Opinion Borrower Provided Appraisal Borrower Provided Camps AfterValue$349,000 TotalProject Costs Q) $255,340 $25,600 0% ----Skin-in-theFirst li en Loan Cushion Q) Game Q) Purchase Price $87,000LoanToARV 65.8% Purchase Date03/12/2021Loan To Total89.6% Q) Q) Q) VALUATION REPORTS The followingfactors determine in part how the loan was graded: (in descendingorder of importance) Loan ToARVScore Q) 10 Quality of ValuationReport 4 location8 Borrower Experience5 Borrower Commitment Q) 1 GRADE FACTORS FINANCIAL OVERVIEW RateProjected Term oan ToARV loan AmountInvestors Purposeloan PositionTotal oan AmountRepayment Terms ,__ F_i_rs_t_L_ie_n ,ll $22 , ;..B=:a..-:l'l-o'.:.:o. ='n-'-p-'-:a.:y.:.:m.:.::.e._n_-t--p-rin_c_i_pa_la_n_d_i_nte_r_e_s-t-, _ . . returned on repayment/ due at maturity. Pacific Holdings NorthWest, LLC Warren Anderson-principal Click here to view the LRO Agreement INVEST NOW Purchase & Renovation

 

 PS-999 

 

 

 

c _ F_ir_s_tL_i_e_n _l. l $ BORROWER , _ _ _ ------------------------------------------------------------I I ti§lftfm#l•JI•t:J ,I¥J.t:f4,MJ!J•li#fli¥0 10/21/2020 89.2% Purchase Date Project Cost (!} View larger map Healthcar .§ qEden F1 8 Von Chelton [ Borrower intends to sell the property to repay the Groundtloor loan. .s' -'torrD S Jell Dav•s Dr Norship Center Y Click here to view the LRO Agreement Mapdata C2021 Terms of Use I II I II I II II I II II TotalDebt (!) Revenue (!) GROUNDFLOOR HISTORY * HISTORICAL AVERAGES Shervan Wilson Completed Projects Average Project II $186.2K I I IL.. 1, 1 2 1 3 CONTAINED THEREINIS HELPFUL WE DONOT USE IT ASTHE SOLE BASIS FOR A FUNDING DEC SION PREPARATION OF ANY OF THEVALUATIONSOURCES OR ANY OTHER MATERIALS PROVIDED BY THE BORROWER. WHILE WE BELIEVE THE DATA THE COMPANY PLAYED NO ROLE IN TI-t FREELANCE PROPERTIES, LLCFINANCIAL DATAPROJECTS/REVENUE DATE OF FORMATION * 01/19/2017 Gross Margin% (!) PRINCIPAL ree vears ending 2020 FOCUS New ConstructionLoans Funded (!)Loans Repaid (!)PerYear (!) Revenue (!) On Time Average ProjectAverage Total Repayment (!)Time (!) Project Costs (!) I0.0% I._ 8_m_o_nt_h_s __.II$121K Report.ng perod:t 30.0% $100K Re ort'ng period:2020 Report"ngdate:12 31/20 MISCELLANEOUS PROJECT SPECIFIC RISK FACTORS • The Borrower was advanced the money it needs to begin construction of this property on March 1,2021by Groundfloor Finance Inc. ("Groundfloor·;"we;·"us·:or "our") or a wholly-owned subsidiary of Groundfloor.The Borrower has begun construction of the property.If this offering is fully subscribed.Groundfloor will continue to administer and service the loan as further described in the Offering Circular. • The borrower has had late repayments, but has repaid all loans in full,with all interest and fees due. • The construction of the property may be extensive,and therefore subject to delays and other unexpected issues. • The construction will require permitting,and permits may not be obtained on time or may be denied. • There is no existing structure on this property,or if there is, it will be demolished,and a new structure built in its place. • The event of default on one Groundtloor note secured by this property will trigger default on all Groundtloor notes secured by this property.All LRO holders investing in LROs corresponding to notes secured by this property share the same priority in any recovery and recovered proceeds will be distributed on a pro-rata basis. • Please consult the OfferingCircular for further discussion of general risk factors. CLOSING CONDITIONS • Loan is conditioned upon a clean title search and valid title insurance at the time of close. DEVELOPER FEES • GROUNDFLOOR generally charges borrowers between 2% and 6% of the principal amount of the loan for our services. • GROUNDFLOOR does not take a 'spread' on any part of the interest payments. • Developers may capitalize the cost of closing into the principalamount of their request.These closing costs typically range from $500 to $1500. • Unless otherwise limited by applicable law,GROUNDFLOOR will charge a penalty of 2% for any extension made to the borrower.See GROUNDFLOOR 'Fees and Expenses' in the OfferingCircular SEC FILING INFORMATION • The series of LROs corresponding to this Project are offered pursuant to Post Qualification Amendment No.79 to the Offering Circular dated December 29,2017 (each,as amended and supplemented from time to time), including the documents incorporated by reference therein.You may access and review these documents on the Internal Filings Directory located on our Platform. Bo Address: 195 BELLEVUE LOOP.FAYETTEVILLE.GA 30215 The Borrower intends to use the loan proceeds to complete a new construction.Upon completion, the s1::-il ls Dr Jmnmgs Pra1se AGo gle INVEST NOW As Complete (ARV) $325,000 Broker's Price Opinion Borrower Provided Appraisal Borrower Provided Comps VALUATION REPORTS The following factors determine in part how the loan was graded: (in descendingorder of importance) LoanToARVScore (!)10 Quality of Valuation Report4 Skin-in-the-Game (!)10 Location8 Borrower Experience5 Borrower Commitment (!)1 GRADE FACTORS FINANCIAL OVERVIEW After Value (ARV) (!) $325,000 TotalCosts (!)$256,970 0% ----Skin-in-theFirst Lien LoanCushion (!) Game (!) Purchase Price (!} $32,000 LoanToARV (!}70.8% Loan ToTotal RateProjected TermLoanToARVLoan Amount Investors PurposeLoan PositionTotalLoan Amount Repayment Terms 229 970 Freelance ProQerties, LLC Shervan Wilson-principal Click here to view the LRO Agreement INVEST NOW r---'-8-a.:....llo_o_n_p_a_y_m_e_n_t--p-ir-nc_i_p-al_a_n_d-in_t_e-re-s---.t returned on repayment I due at maturity. New Construction

 

 PS-1000 

 

 

 

 

BORROWER Morgan Kitchen - principal --------------------------------------------------------------Project Cost (!) View larger map V1ntr.1 Ave l:j Click here to view the LRO Agreement Map data 2021 Terms of Use :!: Value of Properties (!)Total Debt (!) Completed Projects (!) Revenue (!) GROUNDFLOOR HISTORY * HISTORICAL AVERAGES Completed Projects Average Project 1 IL_ 9_m_ont_h_s , l 0.0% $108.2K CONTAINED THEREIN IS HELPFUL, WE DO NOT USE IT AS THE SOLEBASIS FOR A FUNDING DECISION. THE COMPANY PLAYED NO ROLE IN THE PREPARATION OF ANY OF THE VALUAT ON SOURCES OR ANY OTHER MATERIALS PROVIDED BY THE BORROWER.WHILE WE BEL EVE THE DATA M2M HOLDINGS LLCFINANCIAL DATAPROJECTS/ REVENUE Reporting DATE OF FORMATION * 10/23/2015 Gross Margin% (!) PRINCIPAL Morgan Kitchen FOCUS Single FamilyLoans Funded (!) loans Repaid (!)Per Year (!)Revenue (!) IL3_11oII4 II$217.2K On Time Average Project Average Total Repayment (!)Time (!)Project Costs (!) Reporting period:three years ending 2020 35.4% $616.5K period:2020 Reportingdate:12/31/20 PROJECT SPECIFIC RISK FACTORS • The Borrower was advanced the money it needs to begin construction of this property on February 4, 2021by Groundfloor Finance Inc.("Groundfloor;' "we," "us," or "our") or a wholly-owned subsidiary of Groundfloor. The Borrower has begun construction of the property. If this offering is fully subscribed,Groundfloor will continue to administer and service the loan as further described in the Offering Circular. • The construction of the property may be extensive, and therefore subject to delays and other unexpected issues. • The construction will require permitting,and permits may not be obtained on time or may be denied. • There is no existing structure on this property,or if there is,it will be demolished,and a new structure built in its place. • The event of default on one Groundfloor note secured by this property will trigger default on all Groundfloor notes secured by this property. All LRO holders investing in LROs corresponding to notes secured by this property share the same priority in any recovery and recovered proceeds will be distributed on a pro-rata basis. • Please consult the Offering Circular for fur ther discussion of general risk factors. CLOSING CONDITIONS • Loan is conditioned upon a clean title search and valid title insurance at the time of close. DEVELOPER FEES • GROUNDFLOOR generally charges borrowers between 2% and 6% of the principal amount of the loan for our services. • GROUNDFLOOR does not take a 'spread' on any part of the interest payments. • Developers may capitalize the cost of closing into the principal amount of their request. These closing costs typically range from $500 to $1500. • Unless otherwise limited by applicable law,GROUNDFLOOR will charge a penalty of 2% for any extension made to the borrower. See GROUNDFLOOR 'Fees and Expenses' in the Offering Circular SEC FILING INFORMATION • The series of LROs corresponding to this Project are offered pursuant to Post Qualification Amendment No. 79 to the Offering Circular dated December 29,2017 (each,as amended and supplemented from time to time), including the documents incorporated by reference therein. You may access and review these documents on the InternalFilings Directory located on our Platform. South AveS( iGrant Part< PI Address: 176 VANIRAAVENUE SOUTHEAST, ATLANTA. GA 30315 Ormond St Atlanta Ave SEThe Borrower intends to use the loan proceeds to complete a new construction. Upon completion, the Borrower intends to sell the property to repay the Groundfloor loan. KtndnC-k Avt SE Tu tOte St SE rGo "g' le.,tide Brewing q INVEST NOW As Complete (ARV) $500,000 Broker's Price Opinion Borrower Provided Appraisal Borrower Provided Camps After ReValue (ARV) (!)$500,000 Total Project Costs (!)$308,801 0% --------" Skin-in-theFirst Lien LoanCushion (!) Game (!) Purchase Price (!)$90,000Loan ToARV <D55.6% Purchase Date 02/04/2021Loan To Total89.7% VALUATION REPORTS The following factors determine in part how the loan was graded: (in descending order of importance) loanToARVScore (!)10 Quality of Valuation Report4 Skin-in-the-Game (!)10 Location8 Borrower Experience5 Borrower Commitment (!)1 GRADEFACTORS RateLoanToARV Loan Amount Investors Purposeloan Position Total loan Amount Repayment Terms IFirst Lien M2M Holdings LC Click here to view the LRO Agreement INVEST NOW $277,870 New Construction Balloon payment-principal and interest returned on repayment I due at maturity.

 

 PS-1001 

 

 

 

 

7 230 L FINANCIAL OVERVIEW 98.9% 01/26/2021 Purchase Date Project Cost PROPERTY DESCRIPTION <ld View larger map ;' i> 2r. t !•! The Borrower intends to use the loan proceeds to purchase and renovate the property. Upon completion,the 1014 N Harding Ave, z i :1: Gole Click here to view the LRO Agreement Map data ®2021 Te.rms of Use R eport a map error MISCELLANEOUS BORROWER SUMMARY * 'INFORMATIONBELOW IS SUPPLIED BY THE BORROWERAND ISNOT VERIFIED. BORROWERS REPRESENTAND WARRANT THAT INFORMATION SUPPLIED IS ACCURATE. GROUNDFLOOR HISTORY * HISTORICAL AVERAGES Joseph Marquez Completed Projects Average Project Ll _ ----'II II CONTAINEDTHEREIN IS HELPFUL,WE DONOT USEIT AS THE SOLE BASISFORA FUNDING DECISION. THECOMPANYPLAYED NO ROLE IN THE PREPARATIONOF ANY OF THE VALUATION SOURCES OR ANY OTHER MATERIALS PROVIDED BYTHE BORROWER.WHILE WE BELIEVE THE DATA MARQUEZ CONTR ACTORSFINANCIAL DATA PROJECTS / REVENUE CORPORATION DATE OF FORMATION * 03/28/2014 Gross Margin% (2) IPRINCIPAL FOCUS Multifamily 2-4 UnitsLoans Funded (2)Loans Repaid (2)PerYear (2)Revenue (2) 2 02 II$218K On TimeAverage Project Average Total Repayment (2)Time (2)Project Costs (2) 10.0% _Ll _1 2 mon_th_s_--'ll$173.1K Reportingperiod:three years ending 2020 0.0% Reportingperiod:2020 Reportingdate:12/31/20 UNLESSNOTED WITHA PROJECT SPECIFIC RISK FACTORS o The Borrower was advanced the money it needed to purchase this property on January 26,2021by Groundfloor Finance Inc.("Groundfloor "we "us;·or "our") or a wholly-owned subsidiary of Groundfloor. The Borrower is now in possession of the property.If this offeringis fully subscribed,Groundfloor wiIIcontinue to administer and service the loan as further described in the Offering Circular. o The renovation of the property may be extensive,and therefore subject to delays and other unexpected issues. o The renovation will require permitting,and permits may not be obtained on time or may be denied. o The Borrower has not completed or sold any projects in the past year.As such,the Borrower's average revenue,costs,and margins cannot be calculated. o Please consult the Offering Circular for further discussion of general risk factors. CLOSING CONDITIONS o Loan is conditioned upon a clean title search and valid title insurance at the time of close. DEVElOPER FEES o GROUNDFLOOR generally charges borrowers between 2% and 6% of the principal amount of the loan for our services. o GROUNDFLOOR does not take a 'spread' on any part of the interest payments. o Developers may capitalize the cost of closing into the principal amount of their request.These closing costs typically range from $500 to $1500. o Unless otherwise limited by applicable law,GROUNDFLOOR will charge a penalty of 2% for any extension made to the borrower. See GROUNDFLOOR 'Fees and Expenses' in the Offering Circular SEC FiliNG INFORMATION o The series of LROs corresponding to this Project are offered pursuant to Post Qualification Amendment No.79 to the Offering Circular dated December 29,2017 (each,as amended and supplemented from time to time),including the documents incorporated by reference therein. You may access and review these documents on the Internal Filings Directory located on our Platform. z zAutoZone Auto Address: 1014 NORTH HARDING AVENUE, CHICAGO, IL 60651 0 ThomtsSI Chicago,IL 60651Borrower intends to sellthe property to repay the Groundfloor loan. HUMBOLDT z PARK i )>W lowaSt INVEST NOW As Complete (ARV) $385,000 Broker's Price Opinion Borrower Provided Appraisal Borrower Provided Comps After Value$385,000 TotalCosts $290,330 0% ----Skin-in-theFirst li en oan Cushion (2) Game @ Purchase Price $210,000Loan To ARV 74.6% Loan To Total @ {2) ® VALUATION REPORTS The followingfactors determine in part how the loan was graded: (in descending order of importance) Loan To ARV Score (2)10 Quality of ValuationReport 4 Skin-in-the-Game ® 010 location8 Borrower Experience5 Borrower Commitment ® 1 $3,100 GRADE FACTORS Rate loan ToARV loan AmountInvestors Purpose loan Position Total oan Amount Repayment Terms F_i_rs_t_L_ie_n JII $28 ,r--'Ba.-l:.l..o_o_n pa_y_m_en-t --p-r-in_c_i_pa l_a_n_d_i_n-et_r_e_s-t-, . . retu rned on repayme nt/ due at matu rity. BORROWER Click here to view the LRO Agreement Marguez Contractors Coq;Joration Joseph Marquez - principal INVEST NOW Pu rchase & Renovation

 

 PS-1002 

 

 

 

 

Rate Projected Term oanToARV loan Amount Investors • ·.,.._-_ no. Purpose loan Position Total oan Amount Repayment Terms Biodun Bankole-principal FINANCIAL OVERVIEW - Skin-in-the-Game Q) 10 Project Cost PROPERTY DESCRIPTION The Borrower intends to use the loan proceeds to complete a new construction.Upon completion,the "'1l 0+. Femcl; ft RdNE Click here to view the LRO Agreement Map data ®2021 Goog!e Terms of Use Report a map error PROPERTY PHOTOS ;.. . 0 • 1 , .. l •• [ -r r T 1 ..._-r+-rI.;,.rn+mIll f7M·,....,.,. J • <:ea • •9 ·J C1-Sec flo ·-ll!l lllll L • I 1ab Ceili filii I " -0 Malr Floo I. Iall(>UA,. h ll ilha.looaten al .-•0 (' MISCELLANEOUS BORROWER SUMMARY UNLESSNOTEDWITHA * ,INFORMATIONBELOW IS SUPPLIED BY THE BORROWERAND ISNOT VERIFIED. BORROWERS REPRESENTAND WARRANT THAT INFORMATION SUPPLIED IS ACCURATE. Value of Properties Q) Revenue Q) Biodun Bankole Completed Projects Average Project ------'11 ° II Ll CONTAINEDTHEREIN IS HELPFUL,WE DO NOT USE IT AS THE SOLE BASIS FORA FUNDING DECISION. THECOMPANYPLAYED NO ROLE IN THE PREPARATIONOF ANY OF THE VALUATION SOURCESOR ANY OTHER MATERIALS PROVIDED BYTHE BORROWER.WHILE WE BELIEVE THE DATA PRIMALOGIST LLC FINANCI AL DATA PROJECTS I REVENUE DATE OF FORMATION * 04/27/2016 Gross Margin% Q) IPRINCIPALGROUNDFLOOR HISTORY *HISTORICAL AVERAGES FOCUS Fix &Fiip Loans Funded Q)Loans Repaid Q)PerYear Q)Revenue G> 3 2 II $557K On TimeAverage Project Average Total Repayment G>Time Q)Project Costs Q) 10.0%_Ll _12_m_o_n_th_s__,ll$436.7K Reportingperiod:three years ending 2020 20.0% $4.4M $2.6M Reportingperiod:2020 Reportingdate:12/31/20 PROJECT SPECFI IC RISK FACTORS • The Borrower was advanced the money it needs to begin construction of this property on February 8,2021by Groundfloor Finance Inc.("Groundfloor ·"we;'"us · or "our") or a wholly-owned subsidiary of Groundfloor. The Borrower has begun construction of the property.If this offering is fully subscribed, Groundfloor will continue to administer and service the loan as further described in the OfferingCircular. • The construction of the property may be extensive,and therefore subject to delays and other unexpected issues. • The construction willrequire permitting, and permits may not be obtained on time or may be denied. • There will be multiple loans on this project, each representing subsequent draws. The loans will range from $100,000 to $300,000.The Financial Overview box represents the aggregate amount of all loans to be secured by this property,giving a complete financial picture of the project. • There is no existing structure on this property, or if there is,it will be demolished, and a new structure built in its place. • The event of default on one Groundfloor note secured by this property will trigger default on all Groundfloor notes secured by this property. All LRO holders investing in LROs corresponding to notes secured by this property share the same priority in any recovery and recovered proceeds will be distributed on a pro-rata basis. • This loan represents the first draw for the construction project and is secured by an individual note. • Each draw on this project is structured as an individual loan.We will fund each draw from our own capital or credit facilities as and when requested by the Borrower,provided conditions for each draw are met as described in our Offering Circular.Once a draw has been approved and funded,we will then sellthe corresponding series of LROs on our platform, each of which will be due 12 months from the time such series of LRO is deemed issued,as described in our Offering Circular.Subsequent draws are expected to be requested every two months from the date we advanced the first draw,but may be requested sooner,or later, depending on the progress of construction. • Please consult the OfferingCircular for further discussion of general risk factors. CLOSING CONDITIONS • Loan is conditioned upon a clean title search and valid title insurance at the time of close. DEVELOPER FEES • GROUNDFLOOR generally charges borrowers between 2% and 6% of the principal amount of the loan for our services. • GROUNDFLOOR does not take a 'spread' on any part of the interest payments. • Developers may capitalize the cost of closing into the principal amount of their request.These closing costs typically range from $500 to $1500. • Unless otherwise limited by applicable law,GROUNDFLOOR will charge a penalty of 2% for any extension made to the borrower. See GROUNDFLOOR 'Fees and Expenses' in the OfferingCircular SEC FILING INFORMATION • The series of LROs corresponding to this Project are offered pursuant to Post Qualification Amendment No. 79 to the OfferingCircular dated December 29,2017 (each,as amended and supplemented from time to time),including the documents incorporated by reference therein. You may access and review these documents on the Internal Filings Directory located on our Platform. II DO ' [ IIIli ---==t·" --+ 1...., I I ! it Address: 3458 ROCKHAVEN ClRCLE NORTHEAST #1,ATLANTA, GA 30324 'Borrower intends to sellthe property to repay the Groundfloor loan. Go gle<S"o..., INVEST NOW As Complete (ARV) $1,095,000 Broker's Price Opinion Borrower Provided Appraisal Borrower Provided Comps $1,095,000 Total· Costs $855,790 $85,600 0% ----Skin-in-theFirst li en Loan Cushion Q) Game Q) Purchase Price $360,000LoanToARV 70.3% Purchase Date02/08/2021 Loan To Total89.6% Q) Q) Q) VALUATION REPORTS The followingfactors determine in part how the loan was graded: (in descending order of importance) Loan To ARV Score Q) 10 Quality of Valuation Report4 location8 Borrower Experience5 Borrower Commi tment Q) 1 GRADE FACTORS PROJECT SUMMARY I 3458 ROCKHAVEN CIRCLE NORTHEAST H,l ATLANTA,GA 30324 ., ., .... .... ...-.. BORROWER'---F-i_rs_t_L_ie_n _,ll $300,000 Primalogist LLC Click here to view the LRO Agreement INVEST NOW Purchase & Renovation Balloon payment - principaland interest returned on repayment/ due at maturity.

 

 PS-1003 

 

 

 

 

c _ F_ir_s_tL_i_e_n _l. l $ , _ _ _ ------------------------------------------------------------I I 02/22/2021 89.5% Purchase Date Project Cost (!} Address: 3350 LAWRENCE STREET.SCOTTDALE.GA 30079 .tq. ,. ., Borrower intends to sell the property to repay the Groundfloor loan. WalnutS! Click here to view the LRO Agreement Mapdata 021 Terms of Use ·.,_ _..., Value of Properties (!) TotalDebt (!) Completed Projects (!) Revenue (!) GROUNDFLOOR HISTORY * HISTORICAL AVERAGES Jonathan Reid Completed Projects Average Project DATA CONTAINE:D THEREIN IS HELPFUL. WE DONOT USE IT AS THE SOLE BASIS FORA F-UNUINuUK SION. THE COMPANYPLAYfDNOROLE IN THE PREPARAfiONOF-ANY OF THE: VALUAfiONSOURCESORANYOTHERMATERIALSPROVIDEDBY THE: BORROWER. WHILE WE BELIEVE THE TIER1 MANAGEMENT CONSULTINGFINANCIAL DATAPROJECTS/REVENUE GROUP LLC DATE OF FORMATION * 10/01/2020 Unsold Inventory (!)Aged Inventory (!)Gross Margin% (!) PRINCIPAL FOCUS Single FamilyLoans Funded (!)Loans Repaid (!)PerYear (!)Revenue (!) IL o JIIoI I4 II$75K On Time Average ProjectAverage Total Repayment (!) Time (!)Project Costs (!) I0.0% IL-2_m_o_nt_h_s __JII$55K Report..,gper"od:tl-lree ears ending 2020 Report·.,g per"od:2020 Report''lg date·12 31/20 MISCELLANEOUS PROJECT SPECIFIC RISK FACTORS • The Borrower was advanced the money it needs to begin construction of this property on February 22. 2021by Groundfloor Finance Inc.("Groundfloor;·" we:·"us;· or "ourn) or a wholly-owned subsidiary of Groundfloor. The Borrower has begun construction of the property.If this offering is fully subscribed.Groundfloor will continue to administer and service the loan as further described in the Offering Circular. • The Borrower has not completed or sold any projects in the past year. As such, the Borrower's average revenue,costs.and margins cannot be calculated. • The construction of the property may be extensive,and therefore subject to delays and other unexpected issues. • The construction will require permitting.and permits may not be obtained on time or may be denied. • Ihere is no existing structure on this property,or it there is, it will be demolished,and a new structure built in its place. • The event of default on one Groundfloor note secured by this property will trigger default on all Groundfloor notes secured by this property.All LRO holders investing in LROs corresponding to notes secured by this property share the same priority in any recovery and recovered proceeds will be distributed on a pro-rata basis. • Please consult the OfferingCircular for further discussion of general risk factors. CLOSING CONDITIONS • Loan is conditioned upon a clean title search and valid title insurance at the time of close. DEVELOPER FEES • GROUNDFLOOR generally charges borrowers between 2% and 6% of the principal amount of the loan for our services. • GROUNDFLOOR does not take a 'spread' on any part of the interest payments. • Developers may capitalize the cost of closing into the principalamount of their request These closing costs typically range from $500 to $1500. • Unless otherwise limited by applicable law,GROUNDFLOOR will charge a penalty of 2% for any extension made to the borrower.See GROUNDFLOOR 'Fees and Expenses' in the OfferingCircular SEC FILING INFORMATION • The series of LROs corresponding to this Project are offered pursuant to Post Qualification Amendment No.79 to the Offering Circular dated December 29,2017 (each,as amended and supplemented from time to time).including the documents incorporated by reference therein.You may access and review these documents on the InternalFilings Directory located on our Platform. PROPERTY DESCRIPTION View larger map 9Dollar General 1-The Borrower intends to use the loan proceeds to complete a new construction.Upon completion, the DUI Oak Forest ApartrnG1Jc: e INVEST NOW As Complete (ARV) $485,000 Broker's Price Opinion Borrower Provided Appraisal Borrower Provided Comps VALUATION REPORTS The following factors determine in part how the loan was graded: (in descendingorder of importance) LoanToARVScore (!)10 Quality of Valuation Report4 Skin-in-the-Game (!)10 Location8 Borrower Experience5 Borrower Commitment (!)1 GRADE FACTORS FINANCIAL OVERVIEW After Value (ARV) (!) $485,000 TotalCosts (!) $360,460 0% ----Skin-in-theFirst Lien LoanCushion (!) Game (!) Purchase Price (!} $75,000 LoanToARV (!} 66.9% Loan To Total PROJECT SUMMARYI 3350 LAWRENCE STREET,SCOTTDALE,GA 30079 RateProjected TermLoanToARVLoan Amount Investors PurposeLoan PositionTotalLoan Amount Repayment Terms BORROWER 324 260 Tier1Management Consulting GrouP-LLC Jonathan Reid-principal Click here to view the LRO Agreement INVEST NOW r---'-8-a.:....llo_o_n_p_a_y_m_e_n_t--p-ir-nc_i_p-al_a_n_d-in_t_e-re-s---.t returned on repayment I due at maturity. New Construction

 

 PS-1004 

 

 

 

 

Rate Projected Term LoanToARV Loan Amount Investors _ . . Project Cost Address: 4227 MATISSE LANE,FAIRBURN.GA 30213 !,... ® .. \ Go gle ""'""' Value of Properties (!) TotalDebt (!) Completed Projects (!) Revenue (!) GROUNDFLOOR HISTORY * HISTORICAL AVERAGES Completed Projects Average Project I.._2 ,11 II $622.3K II 1 o CONTAINED THEREIN ISHELPFUL,WE DO NOT USf IT AS THf SOLE BASIS FOR A FUNDING DEC•SION PREPARATION OF ANY OF THEVALUATIONSOURCES OR ANY OTHER MATFRIALS PROVIDED BY THE BORROWER. WHILE WE BEL IEVE THE DATA THE COMPANY PLAYED NO ROLE IN TH * 'INFORMATIONBELOW IS SUPPLIED BY THE BORROWER AND IS NOT VERIFIED. BORROWERS REPRESENT ANDWARRANT THAT INFORMATION SUPPLIED IS ACCURATE. BLITE INVESTMENT GROUP LLCFINANCIAL DATAPROJECTSI REVENUE DATE OF FORMATION * 05/23/2018 Gross Margin% (!) PRINCIPAL Antoinette Blount FOCUS Single FamilyLoans Funded (!) Loans Repaid (!) PerYear (!)Revenue (!) On Time Average ProjectAverage Total Repayment (!)Time (!) Project Costs (!) I0.0% I._9_m_o_nt_h_s --'II$414K ,ending 2020 33.0% $2.SM $1.8M Reoort'ng pe1 ;od:2020 Report''lg date:12 31/20 UNLESS NOTED WITH A BORROWER SUMMARY PROJECT SPECIFIC RISK FACTORS • The Borrower was advanced the money it needed to begin renovation of this property on February 3,2021by Groundfloor Finance Inc.("Groundfloor" "we;' "us:· or "our") or a wholly-owned subsidiary of Groundfloor.The Borrower has now begun renovation of the property.If this offering is fully subscribed,Groundfloor will continue to administer and service the loan as further described in the Offering Circular. • The renovation of the property may be extensive,and therefore subject to delays and other unexpected issues. • The renovation willrequire permitting,and permits may not be obtained on time or may be denied. • The Borrower is using $240,000 of the loan proceeds to pay off an existing loan that was used to acquire the property.Groundfloor willassume the first lien position.The rest of the loan proceeds will be put towards the renovation of the property, much like an acquisition and renovation loan. • Please consult the Offering Circular for further discussion of general risk factors. CLOSING CONDITIONS • Loan is conditioned upon a clean title search and valid title insurance at the time of close. DEVELOPER FEES • GROUNDFLOOR generally charges borrowers between 2% and 6% of the principal amount of the loan for our services. • GROUNDFLOOR does not take a 'spread' on any part of the interest payments. • Developers may capitalize the cost of closing into the principalamount of their request. These closing costs typically range from $500 to $1500. • Unless otherwise limited by applicable law,GROUNDFLOOR will charge a penalty of 2% for any extension made to the borrower.See GROUNDFLOOR 'Fees and Expenses' in the Offering Circular SEC FILING INFORMATION • The series of LROs corresponding to this Project are offered pursuant to Post Qualification Amendment No.79 to the Offering Circular dated December 29,2017 (each,as amended and supplemented from time to time), including the documents incorporated by reference therein.You may access and review these documents on the InternalFilings Directory located on our Platform. T V1ew larger map The Borrower intends to use the loan proceeds to renovate the property.Upon completion, the Borrower intends to sell the property to repay the Groundfloor loan. ¢ ,.,. #<;).Map data @2021 Terms of UseClick here to view the LRO Agreement INVEST NOW "<a-ln As Complete (ARV) $455,000 Broker's Price Opinion Borrower Provided Appraisal Borrower Provided Camps Certified Independent Appraisal VAlUATION REPORTS The following factors determine in part how the loan was graded: (in descendingorder of importance) LoanToARVScore (!) 10 Quality of Valuation Report4 Skin-in-the-Game (!) 10 Location8 Borrower Experience5 Borrower Commitment (!) 1 GRADE FACTORS FINANCIAOl VERVIEW After Repair Value (ARV) (!) $455,000 TotalCosts (!)$385,040 0% ----Skin-in-the First Lien LoanCushion(!) Game(!) Purchase Price $320,000 LoanToARV71.4% Purchase Date 12/07/2018Loan To Total 83.8% PurposeLoan Position TotalLoan Amount Repayment Terms L _F_ir_st_L_i_en_ J]] $ , 325 040 Click here to view the LRO Agreement BORROWER Blite Investment GrouQ LLC Antoinette Blount-principal INVEST NOW .--'8a.l:.l_o_o_n_p_a_y_m_e_n_t - pr-in-c_i_pa-l_a_n_d-in_t_ere-s-t--, returned on repayment I due at maturity. Refinance Rehab

 

 PS-1005 

 

 

 

 

6 390 maturity. FINANCIAL OVERVIEW Project Cost PROPERTY DESCRIPTION Address: 859 GLENWOOD AVENUE,CINCINNATI,OH 45229 View larger map The Borrower intends to use the loan proceeds to purchase and renovate the property. Upon completion,the Borrower i ntends to sellthe property to repay the Groundfloor loan. 2nds 9 L 1!\ :Ave O'Brien Click here to vi ew the LRO Agreement R....... Map data ®2021 Terms of Use Report a map error tocltdeloAvi! MISCELLANEOUS BORROWER SUMMARY BORROWERS REPRESENTAND WARRANT THAT INFORMATION SUPPLIED IS ACCURATE. Lai s Keese Completed Projects Average Project CONTAINEDTHEREIN IS HELPFUL,WE DO NOT USE IT AS THE SOLE BASIS FOR A FUNDING DECISION. THECOMPANY PLAYED NO ROLE IN THE PREPARATIONOF ANY OF THE VALUATION SOURCESOR ANY OTHERMATERIALS PROVIDED BYTHE BORROWER.WHILE WE BELIEVE THE DATA LAIS KEESE HOMES LLC FINANCIAL DATA PROJECTS I REVENUE DATE OF FORMATION * 05/21/2020 Gross Margin% (!) IPRINCIPALGROUNDFLOOR HISTORY *HISTORICAL AVERAGES FOCUS Single FamilyLoans Funded (!) Loans Repaid (!) PerYear (!) Revenue (!) Ll1-----'11°II1 II$290K On TimeAverage Project Average Total Repayment (!) Time (!) Project Costs (!) 10.0%LI _ 1S_m_o_n_th_s_-'ll$250K Reportingperiod:three years ending 2020 0.0% Reportingperiod:2020 Reportingdate:12/31/20 UNLESSNOTED WITHA * 'INFORMATIONBELOW IS SUPPLIED BY THE BORROWER AND ISNOT VERIFIED. PROJECT SPECIFIC RISK FACTORS • The Borrower was advanced the money i t needed to purchase this property on March 9,2021by Groundfloor Finance Inc.("Groundfloor;·"we;·"us;·or "our") or a wholly-owned subsidiary of Groundfloor. The Borrower is now in possession of the property.I f this offering is fully subscribed,Groundfloor will continue to administer and service the loan as further described in the Offering Circular. • The renovati on of the property may be extensive,and therefore subject to delays and other unexpected i ssues. • The renovati on will require permitting,and permits may not be obtained on time or may be denied. • The Borrower has not completed or sold any projects in the past year.As such,the Borrower's average revenue,costs, and margins cannot be calculated. • Please consult the Offering Circul ar for further discussion of general ri sk factors. CLOSING CONDITIONS • Loan is conditioned upon a clean ti tle search and valid title i nsurance at the time of close. DEVElOPER FEES • GROUNDFLOOR generally charges borrowers between 2% and 6% of the principal amount of the loan for our services. • GROUNDFLOOR does not take a 'spread' on any part of the interest payments. • Developers may capitalize the cost of closing into the principal amount of their request.These closing costs typically range from $500 to $1500. • Unless otherwise limited by applicable l aw,GROUNDFLOOR will charge a penalty of 2% for any extension made to the borrower. See GROUNDFLOOR 'Fees and Expenses' in the Offering Circular SEC FiliNG INFORMATION • The series of LROs corresponding to this Project are offered pursuant to Post Qualification Amendment No.79 to the Offering Circular dated December 29,2017 (each,as amended and supplemented from time to time),including the documents i ncorporated by reference therein. You may access and review these documents on the Internal Filings Directory located on our Platform. c.;tt.arfOllro,., xington Ave ' =amily Dollar ... ""'•"'•••o• gleTerrace INVEST NOW As Compl ete (ARV) $489,000 Broker's Price Opinion Borrower Provided Appraisal Borrower Provided Comps After RepairValue(ARV) (!) $489,000 $72,610 TotalProject Costs (!) $416,390 $70,000 0% Skin-in-theFirst lien Loan Cushion (!) Game (!) Purchase Price $295,000Loan To ARV70.8% Purchase Date03/09/2021Loan To Total82.5% (!) {!) (!) VALUATION REPORTS The followingfactors determine in part how the loan was graded: (in descending order of importance) Loan To ARV Score (!) 10 Quality of Valuation Report4 Skin-in-the-Game (!) 10 location8 Borrower Experience5 Borrower Commitment (!) 1 GRADE FACTORS PROJECT SUMMARY I 859 GLENWOOD AVENUE,CINCINNATI,OH 45229 Rate Projected Term loan ToARVloan AmountInvestors Purposeloan PositionTotal loan Amount Repayment Terms ,__ F_ir_s_t _Li_e_n _JI I $34 ,;..=B:..::al-'-'1o:..:.on::.c:_p.:..:a.:..:y.:..:cm:e._n_t pri_n_ci_p_al_a_n_d_i_nte_r_ BORROWER_ . . returned on repayment/ due at Lais Keese Homes LLC Lais Keese-principal Click here to view the LRO Agreement est--, INVEST NOW Purchase & Renovation

 

 PS-1006 

 

 

 

 

BORROWER 9 000 I - Skin-in-the-Game Q) 10 I Skin-in-the First lien Loan Cushion Q) Project Cost "'' View larger map landets ()r SW Click here to view the LRO Agreement .. Map data ®2021 Goog!e Terms of Use Report a map error · ·-. , Value of Properties Q) Revenue Q) Brandon Jones-Thomas Completed Projects Average Project ° II L,l _ ----'11 CONTAINEDTHEREIN IS HELPFUL,WE DONOT USE IT AS THE SOLE BASIS FOR A FUNDING DECISION. THECOMPANYPLAYED NO ROLE IN THE PREPARATIONOF ANY OFTHE VALUATION SOURCESOR ANY OTHERMATERIALS PROVIDED BYTHE BORROWER.WHILE WE BELIEVE THEDATA * ,INFORMATIONBELOW IS SUPPLIED BY THE BORROWERAND ISNOT VERIFIED. BORROWERS REPRESENTAND WARRANT THAT INFORMATION SUPPLIED IS ACCURATE. THE JONESTHOMAS GROUP LLC FINANCIAL DATAPROJECTS /REVENUE DATE OF FORMATION * 08/02/2011 Gross Margin% Q) IPRINCIPALGROUNDFLOOR HISTORY *HISTORICAL AVERAGES FOCUS Single FamilyLoans Funded Q)Loans Repaid Q)PerYear Q)Revenue Q) 13 II$203.5K On TimeAverage Project Average Total Repayment Q) Time Q)Project Costs Q) 10.0% _Ll _9_m_o_n_th_s _--'ll$125.7K Reportingperiod:three years ending 2020 40.83% $1.4M $165K Reportingperiod:2020 Reportingdate:12/31/20 UNLESSNOTED WITHA BORROWER SUMMARY PROJECT SPECIFIC RISK FACTORS • The Borrower was advanced the money it needs to begin construction of this property on February 17,2021by Groundfloor Finance Inc.("Groundfloor;·"we;·"us;· or "our") or a wholly-owned subsidiary of Groundfloor. The Borrower has begun construction of the property. If this offering is fully subscribed,Groundfloor will continue to administer and service the loan as further described in the OfferingCircular. • The construction of the property may be extensive,and therefore subject to delays and other unexpected issues. • The construction willrequire permitting, and permits may not be obtained on time or may be denied. • There is no existing structure on this property,or if there is,it will be demolished,and a new structure built in its place. • The event of default on one Groundfloor note secured by this property will trigger default on all Groundfloor notes secured by this property. All LRO holders investing in LROs corresponding to notes secured by this property share the same priority in any recovery and recovered proceeds will be distributed on a pro-rata basis. • Please consult the Offering Circular for further discussion of general risk factors. CLOSING CONDITIONS • Loan is conditioned upon a clean title search and valid title insurance at the time of close. DEVElOPER FEES • GROUNDFLOOR generally charges borrowers between 2% and 6% of the principal amount of the loan for our services. • GROUNDFLOOR does not take a 'spread' on any part of the interest payments. • Developers may capitalize the cost of closing into the principal amount of their request.These closing costs typically range from $500 to $1500. • Unless otherwise limited by applicable law,GROUNDFLOOR will charge a penalty of 2% for any extension made to the borrower. See GROUNDFLOOR 'Fees and Expenses' in the Offering Circular SEC FiliNG INFORMATION • The series of LROs corresponding to this Project are offered pursuant to Post Qualification Amendment No.79 to the Offering Circular dated December 29,2017 (each,as amended and supplemented from time to time),including the documents incorporated by reference therein. You may access and review these documents on the Internal Filings Directory located on our Platform. MISCELLANEOUS Address: 0 FONTAINE RD,MABLETON,GA 30126 The Borrower intends to use the loan proceeds to complete a new construction.Upon completion,the Borrower intends to sellthe property to repay the Groundfloor loan. Go gle INVEST NOW PROPERTY DESCRIPTION After Value$575,000 TotalProject Costs Q)$435,000 $56,000 0%----Game Q) Purchase Price$98,000 Loan ToARV65.9% Purchase Date02/17/2021 Loan To Total86.8% Q) Q') Q) VALUATION REPORTS As Complete (ARV) $575,000 Broker's Price Opinion Borrower Provided Appraisal Borrower Provided Camps FINANCIAL OVERVIEW GRADE FACTORS The followingfactors determine in part how the loan was graded: (in descending order of importance) Loan To ARV Score Q) 10 Quality of ValuationReport4 location8 Borrower Experience5 Borrower Commitment Q)1 RateProjected Termloan ToARV loan AmountInvestors Purpose loan PositionTotal oan Amount Repayment Terms ,__ F_i_rs_t_L_ie_n ,l I $37 , ,..B=:a...::l.lco.:.:o. =.:n.:..p..:.:a.:y.:.:m.:.::.e._n_t p_r_in_c_i_p_al_a_n_d_i_nte_r_e_s-t-, _ . . returned on repayment/ due at maturity. The JonesThomas GrouQ LLC Brandon Jones-Thomas ' principal Cli ck here to view the LRO Agreement INVEST NOW New Construction

 

 PS-1007 

 

 

 

 

2 810 L LC Corinne Kelly - principal FINANCIAL OVERVIEW Project Cost PROPERTY DESCRIPTION View larger map >nt.q., Phoenix, AZ 85006 Borrower intends to sell the property to repay the Groundfloor loan. !f E Sllerdi a11 St O ,S e -_. E Sherdi anSt m HTS Map data ®2021-Terms of Use..f Report a map e;.o. r Click here to view the LRO Agreement MISCELLANEOUS BORROWER SUMMARY * 'INFORMATIONBELOW ISSUPPLIEDBYTHE BORROWER AND ISNOT VERIFIED. BORROWERS REPRESENTAND WARRANT THAT INFORMATION SUPPLIED IS ACCURATE. Value of Properties CDTotal Debt CD Revenue CD GROUNDFLOOR HISTORY * HISTORICAL AVERAGES Corinne Kelly Compl eted Projects Average Project II '-----1 -----'11 CONTAINED THEREIN IS HELPFUL,WE DONOT USE IT AS THE SOLE BASISFOR A FUNDING DECISION. THECOMPANY PLAYED NO ROLE IN THE PREPARATION OF ANY OF THE VALUATION SOURCES OR ANY OTHER MATERIALS PROVIDED BYTHE BORROWER. WHI LE WE BELIEVE THE DATA DC KELLY INVESTMENTS LLCFINANCIAL DATAPROJECTS / REVENUE DATE OF FORMATION * 08/06/2019 Gross Margin% CD IPRINCIPAL FOCUS Single FamilyLoans Funded CDLoans Repaid CDPerYear CDRevenue CD 6 2 3 II$171K On TimeAverage Project Average Total Repayment CDTime CDProject Costs CD 1100.0% '-l6_m_o_nt_hs___,II$129K Reporting period:three years ending 2020 25.0% $683.9K $130K Reporting period:2020 Reportingdate:12/31/20 UNLESSNOTEDWITHA PROJECT SPECIFIC RISK FACTORS o The Borrower was advanced the money it needed to purchase this property on March 10,2021by Groundfloor Finance Inc.("Groundfloor "w e "us or "our") or a wholly-owned subsidiary of Groundfloor. The Borrower is now in possession of the property.If this offering is fully subscribed,Groundfloor will continue to administer and service the loan as further described in the Offering Circular. o The renovation of the property may be extensive,and therefore subject to delays and other unexpected issues. o The renovation will require permitting,and permits may not be obtained on time or may be denied. o Please consult the OfferingCircul ar for further discussion of general risk factors. CLOSING CONOITIONS o Loan is conditioned upon a clean title search and valid title insurance at the time of close. DEVELOPER FEES o GROUNDFLOOR generally charges borrowers between 2% and 6% of the principal amount of the l oan for our services. o GROUNDFLOOR does not take a 'spread' on any part of the interest payments. o Developers may capitalize the cost of closing into the principal amount of their request.These closing costs typically range from $500 to $1500. o Unless otherwise limited by applicable l aw,GROUNDFLOOR will charge a penalty of 2% for any extension made to the borrower. See GROUNDFLOOR 'Fees and Expenses' in the Offering Circular SEC FILING INFORMATION • The seri es of LROs corresponding to this Project are offered pursuant to Post Qualification Amendment No.79 to the Offering Circular dated December 29,2017 (each,as amended and supplemented from time to time),including the documents incorporated by reference therein. You may access and review these documents on the Internal Filings Directory located on our Platform. '"" Nonn H1qn scnoo1yThomas RdAddress: 2618 NORTH DAYTON STREET,PHOENIX,AZ 85006 0SENIOR LIVING CCOUUBNPTARRYK2618 N Dayton Sl, The Borrower intends to use the l oan proceeds to purchase and renovate the property. Upon compl etion,the EC4n)Qridge •:•ve E Virginla AveE Virgini;,Ave z MARSHALL P M O RE G , "'z z INVEST NOW As Complete (ARV) $575,000 Broker's Price Opinion Borrower Provided Appraisal Borrower Provided Comps After RepairValue (ARV) CD$575,000 TotalProject Costs CD$469,810 $37,000 0% ----Skin-in-theFirst li en Loan Cushion CD Game CD Purchase Price $367,000Loan To ARV 75.3% Purchase Date 03/10/2021Loan To Total91.9% CD CD CD VALUATION REPORTS The following factors determine in part how the loan was graded: (in descendingorder of importance) Loan To ARV Score CD10 Quality of ValuationReport4 Skin-in-the-Game CDII10 location8 Borrower Experience5 Borrower Commi tment CD1 GRADE FACTORS - - Rate loan ToARV loan AmountInvestors Purpose loan PositionTotal oan Amount Repayment Terms F_i_rs_t_L_ie_n JII $43 ,,---:Ba.-l.:l..o_o_n_pay_m_en__t-p_ -r inc_i_p_al_a_n_d_i_nte_r_e_s-t-, . . returned on repayment/ due at maturity. Click here to view the LRO Agreement BORROWER DC KellY. I nvestments L INVEST NOW Purchase & Renovation

 

 PS-1008 

 

 

 

 GROUNDFLOOR FINANCE INC. 

AND SUBSIDIARIES

 

Consolidated Financial Statements

 

December 31, 2020 and 2019

 

GROUNDFLOOR FINANCE INC. AND SUBSIDIARIES

 

Table of Contents

 

December 31, 2020 and 2019

 

Independent Auditors’ Report F-2
   
Consolidated Financial Statements  
   
Consolidated Balance Sheets F-4
   
Consolidated Statements of Operations F-5
   
Consolidated Statements of Stockholders’ Deficit F-6
   
Consolidated Statements of Cash Flows F-7
   
Notes to Consolidated Financial Statements F-9

 

T:\tm2112334-1\tm2112334-1_1aposseq1 

 

Independent Auditor’s Report

 

To the Board of Directors 

Groundfloor Finance, Inc. and Subsidiaries

Atlanta, Georgia

 

We have audited the accompanying consolidated financial statements of Groundfloor Finance, Inc. and Subsidiaries (the “Company”), which comprise the consolidated balance sheets as of December 31, 2020 and 2019 and the related statements of operations, stockholders’ deficit, and cash flows for the years then ended, and the related notes to the consolidated financial statements.

 

Management’s Responsibility for the Consolidated Financial Statements

 

Management is responsible for the preparation and fair presentation of these consolidated financial statements in accordance with accounting principles generally accepted in the United States of America; this includes the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of consolidated financial statements that are free from material misstatement, whether due to fraud or error.

 

Auditor’s Responsibility

 

Our responsibility is to express an opinion on these consolidated financial statements based on our audits. We conducted our audits in accordance with auditing standards generally accepted in the United States of America. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free from material misstatement.

 

 

 

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the consolidated financial statements. The procedures selected depend on the auditor’s judgment, including the assessment of the risks of material misstatement of the consolidated financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity’s preparation and fair presentation of the consolidated financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity’s internal control. Accordingly, we express no such opinion. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements.

 

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.

 

Opinion

 

In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of the Company as of December 31, 2020 and 2019, and the results of its operations and its cash flows for the years then ended in accordance with accounting principles generally accepted in the United States of America.

 

Substantial Doubt about the Company’s Ability to Continue as a Going Concern

 

The accompanying consolidated financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 1 to the consolidated financial statements, the Company has incurred losses and cash outflows from operations since its inception which result in substantial doubt about the ability of the Company to continue as a going concern. Management’s evaluation of the events and conditions and management’s plans regarding those matters also are described in Note 1. The consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty. Our opinion is not modified with respect to that matter.

 

T:\tm2112334-1\tm2112334-1_1aposseq1 

 

Atlanta, Georgia,
March 15, 2021

 

cbh.com

 

F-3

 

 

GROUNDFLOOR FINANCE INC. AND SUBSIDIARIES

 

Consolidated Balance Sheets

 

   December 31, 
   2020   2019 
Assets          
Current assets:          
Cash  $1,429,172   $1,699,196 
Loans to developers, net   63,215,374    73,851,996 
Interest receivable on loans to developers   3,545,454    2,867,914 
Other current assets   2,631,801    937,645 
Total current assets   70,821,801    79,356,751 
Property, equipment, software, website, and intangible assets, net   1,056,577    971,607 
Other assets   71,302    42,603 
Total assets  $71,949,680   $80,370,961 
Liabilities and Stockholders’ Deficit          
Current liabilities:          
Accounts payable and accrued expenses  $2,189,807   $4,602,116 
Accrued interest on limited recourse obligations   2,831,984    2,251,926 
Limited recourse obligations, net   45,926,226    53,124,759 
Revolving credit facility   -    10,460,752 
Convertible notes, net of discount of $126,352 and $368,526   2,661,774    3,238,474 
Short-term notes payable   19,806,920    8,085,257 
Total current liabilities   73,416,711    81,763,284 
Other liabilities   138,680    136,819 
Total liabilities   73,555,391    81,900,103 
Commitments and contingencies (See Note 12)          
Stockholders’ deficit:          
Common stock, no par, 5,000,000 shares authorized, 2,165,923 and 2,102,720 issued and outstanding   11,596,087    10,564,771 
Series A convertible preferred stock, no par, 747,385 shares designated, 747,373 shares issued and outstanding (liquidation preference of $4,999,925)   4,962,435    4,962,435 
Series Seed convertible preferred stock, no par, 575,000 shares designated, 568,796 shares issued and outstanding (liquidation preference of $2,721,091)   2,609,091    2,609,091 
Series B convertible preferred stock, no par, 548,546 shares designated, 188,036 and 0 shares issued and outstanding (liquidation preference of $3,427,896 and $0)   3,145,092    - 
Additional paid-in capital   2,336,551    1,802,895 
Accumulated deficit   (26,254,407)   (21,467,774)
Stock subscription receivable   (560)   (560)
Total stockholders’ deficit   (1,605,711)   (1,529,142)
Total liabilities and stockholders’ deficit  $71,949,680   $80,370,961 

  

See accompanying notes to consolidated financial statements

 

F-4

 

 

GROUNDFLOOR FINANCE INC. AND SUBSIDIARIES

 

Consolidated Statements of Operations

 

   Year Ended December 31, 
   2020   2019 
Non-interest revenue:          
Origination fees  $2,548,305   $2,748,150 
Loan servicing revenue   1,348,332    1,964,284 
Total non-interest revenue   3,896,637    4,712,434 
Net interest income:          
Interest income   7,597,436    6,323,801 
Interest expense   (6,042,535)   (4,633,122)
Net interest income   1,554,901    1,690,679 
Revenue   5,451,538    6,403,113 
Cost of revenue   (611,436)   (779,756)
Gross profit   4,840,102    5,623,357 
Operating expenses:          
General and administrative   3,006,854    2,514,202 
Sales and customer support   2,457,720    2,939,149 
Development   1,205,399    1,125,071 
Regulatory   353,103    208,874 
Marketing and promotions   1,453,840    1,515,558 
Total operating expenses   8,476,916    8,302,854 
Loss from operations   (3,636,814)   (2,679,497)
Interest expense on corporate debt instruments   1,149,819    1,157,769 
Net loss  $(4,786,633)  $(3,837,266)

 

See accompanying notes to consolidated financial statements

 

F-5

 

 

GROUNDFLOOR FINANCE INC. AND SUBSIDIARIES

 

Consolidated Statements of Stockholder’s Deficit

 

   Series A   Series Seed   Series B                         
   Convertible   Convertible   Convertible       Additional       Stock   Total 
   Preferred Stock   Preferred Stock   Preferred Stock   Common Stock   Paid-in   Accumulated   Subscription   Stockholders’ 
   Shares   Amount   Shares   Amount   Shares   Amount   Shares   Amount   Capital   Deficit   Receivable   Equity 
Stockholders’ equity as of December 31, 2018   747,373    4,962,435    568,796    2,609,091    -    -    1,732,585    6,125,264    1,083,572    (17,630,508)   (560)   (2,850,706)
2019 Crowdfunded equity raise, net of offering costs   -    -    -    -    -    -    207,735    3,073,307    -    -    -    3,073,307 
Issuance of bonus shares                                 6,800    -    -              - 
Exercise of stock options                                 7,937    17,379    -              17,379 
Conversion of convertible note                                 147,663    1,348,821    -              1,348,821 
Share-based compensation expense   -    -    -    -    -    -    -    -    318,545         -    318,545 
Beneficial conversion feature                                           400,778              400,778 
Net loss   -    -    -    -    -    -    -    -    -    (3,837,266)   -    (3,837,266)
Stockholders’ equity as of December 31, 2019   747,373    4,962,435    568,796    2,609,091    -    -    2,102,720    10,564,771    1,802,895    (21,467,774)   (560)   (1,529,142)
2020 Crowdfunded equity raise, net of offering costs   -    -    -    -    -    -    30,794    538,720    -    -    -    538,720 
Issuance of Series B preferred shares, net of offering costs                       159,748    2,679,234    -    -    -              2,679,234 
Conversion of convertible notes                       28,288    465,858    30,841    488,707    -              954,565 
Exercise of stock options                                 1,568    3,889    -              3,889 
Share-based compensation expense   -    -    -    -    -    -    -    -    533,656         -    533,656 
Net loss   -    -    -    -    -    -    -    -    -    (4,786,633)   -    (4,786,633)
Stockholders’ equity as of December 31, 2020   747,373    4,962,435    568,796    2,609,091    188,036    3,145,092    2,165,923    11,596,087    2,336,551    (26,254,407)   (560)   (1,605,711)

 

See accompanying notes to consolidated financial statements

 

F-6

 

 

GROUNDFLOOR FINANCE INC. AND SUBSIDIARIES

 

Consolidated Statements of Cash Flows

 

    Year Ended December 31,  
    2020     2019  
Cash flows from operating activities                
Net loss   $ (4,786,633 )   $ (3,837,266 )
Adjustments to reconcile net loss to net cash flows from operating activities:                
Depreciation and amortization     527,862       481,533  
Share-based compensation     533,656       401,930  
Noncash interest expense     274,674       85,089  
Loss on sale of real estate owned     16,816       -  
Origination of loans held for sale     (1,060,410 )     (13,659,207 )
Proceeds from sales of loans held for sale     1,968,800       15,320,281  
Debt conversion inducement expense     41,633       -  
Changes in operating assets and liabilities:                
Other assets     8,406       (133,042 )
Interest receivable on loans to developers     (677,540 )     (1,085,699 )
Accounts payable and accrued expenses     (2,316,392 )     2,308,919  
Accrued interest on limited recourse obligations     580,059       887,310  
Net cash flows from operating activities     (4,889,069 )     769,848  
Cash flows from investing activities                
Loan payments to developers     (66,314,737 )     (87,710,983 )
Repayments of loans from developers     69,503,979       46,214,398  
Proceeds from sale of properties held for sale     1,715,352       2,018,836  
Purchases of computer equipment and furniture and fixtures     (53,499 )     (50,373 )
Payments of software and website development costs     (559,332 )     (569,749 )
Other investing activities     (80,000 )     -  
Net cash flows from investing activities     4,211,763       (40,097,871 )
Cash flows from financing activities                
Proceeds from limited recourse obligations     62,279,248       72,042,001  
Repayments of limited recourse obligations     (66,610,220 )     (47,889,960 )
Borrowings from the revolving credit facility     3,069,028       58,820,632  
Repayments on the revolving credit facility     (13,562,280 )     (53,827,652 )
Proceeds from issuance of short-term notes payable     68,950,380       24,070,230  
Repayments of short-term notes payable     (58,057,817 )     (17,260,860 )
Proceeds from issuance of convertible notes     288,000       3,174,000  
Proceeds from loan under Paycheck Protection Program     829,100       -  
Proceeds from issuance of Series B convertible preferred stock, net of offering costs     2,679,234       -  
Proceeds from issuance of common stock, net of offering costs     538,720       3,073,307  
Repayments of convertible notes     -       (450,000 )
Repayment of 2017 Note     -       (1,750,000 )
Payment of deferred financing costs     -       (61,250 )
Exercise of stock options     3,889       17,379  
Net cash flows from financing activities     407,282       39,957,827  
Net increase (decrease) in cash     (270,024 )     629,804  
Cash as of beginning of the year     1,699,196       1,069,392  
Cash as of end of the year   $ 1,429,172     $ 1,699,196  
Supplemental cash flow disclosures:                
Cash paid for interest   $ 1,260,238     $ 1,218,759  

 

F-7

 

 

GROUNDFLOOR FINANCE INC. AND SUBSIDIARIES

 

Consolidated Statements of Cash Flows

 

   Year Ended December 31, 
   2020   2019 
Supplemental disclosure of noncash investing and financing activities:          
Loans to developers transferred to other real estate owned  $4,911,985   $2,015,376 
Write-down of loans to developers, net and limited recourse obligations, net   308,676    484,282 
Write-down of interest receivable on loans to developers and accrued interest on limited recourse obligations   3,002,041    224,106 
Conversion of convertible notes payable and accrued interest into common stock or Series B convertible preferred stock   912,933    1,348,821 
Increase in allowance for loan to developers and limited recourse obligations   640,000    - 
Issued warrants in connection with notes payable   -    139,896 
Issued advance agreements for convertible notes payable   -    288,000 

 

See accompanying notes to consolidated financial statements

 

F-8

 

 

GROUNDFLOOR FINANCE INC. AND SUBSIDIARIES

 

Notes to Consolidated Financial Statements

 

NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

 

Description of Business

 

The terms "we," "our," “GROUNDFLOOR,” or the "Company" refer to Groundfloor Finance Inc. and its subsidiaries. The Company was originally organized as a North Carolina limited liability company under the name of Fomentum Labs LLC on January 28, 2013. Fomentum Labs LLC changed its name to Groundfloor LLC on April 26, 2013, and converted into a North Carolina corporation on July 26, 2013. In connection with this conversion, all equity interests in Groundfloor LLC were converted into shares of GROUNDFLOOR Inc.’s common stock. In August 2014, GROUNDFLOOR Inc. converted into a Georgia corporation and changed its name to Groundfloor Finance Inc. The accounting effects of these conversions were reflected retrospectively in the Consolidated Financial Statements. Groundfloor Holdings GA, LLC is the holder of the Revolver, as defined in Note 7. Groundfloor Properties GA LLC was created for the purpose of financing real estate in Georgia. Groundfloor Real Estate 1 LLC, Groundfloor Real Estate 2 LLC, and Groundfloor Yield LLC were created for the purpose of financing real estate in any state. Groundfloor Real Estate, LLC is currently inactive and management does not have plans to use this entity in the near future.

 

The Company has developed an online investment platform designed to crowdsource financing for real estate development projects (the “Projects”). With this online investment platform (the “Platform”), public investors (the “Investors”) are able to choose between multiple Projects, and real estate developers (the “Developers”) of the Projects are able to obtain financing. GROUNDFLOOR’s financing model replaces traditional sources of financing for Projects with the aggregation of capital from Investors using the internet.

 

Basis of Presentation and Liquidity

 

The Company’s Consolidated Financial Statements include Groundfloor Finance Inc. and its wholly owned subsidiaries, Groundfloor Properties GA LLC; Groundfloor Real Estate, LLC; Groundfloor Holdings GA, LLC; Groundfloor Real Estate 1 LLC; Groundfloor Real Estate 2, LLC; and Groundfloor Yield LLC (collectively the “Company” or “GROUNDFLOOR”). Intercompany transactions and balances have been eliminated upon consolidation.

 

The Company’s Consolidated Financial Statements have been prepared on a going concern basis, which contemplates the realization of assets and settlement of liabilities and commitments in the normal course of business.

 

Operations since inception have consisted primarily of organizing the Company, developing the technology, and securing financing. The accompanying Consolidated Financial Statements have been prepared on a basis which assumes that the Company will continue as a going concern. The Company has incurred losses and cash outflows from operations since its inception. The ultimate success of the Company is dependent on management’s ability to develop and market its products and services at levels sufficient to generate operating revenues in excess of expenses.

 

Management evaluated the condition of the Company and has determined that until such sales levels can be achieved, management will need to secure additional capital to continue growing working capital and fund product development and operations.

 

Management intends to raise additional debt or equity financing to grow working capital and fund operations. Management believes the Company will obtain additional funding from current and new Investors in order to sustain operations. However, there are no assurances that the Company can be successful in obtaining the additional capital or that such financing will be on terms favorable or acceptable to the Company.

 

There is substantial doubt that the Company will continue as a going concern for at least 12 months following the date these Consolidated Financial Statements are issued, without additional financing based on the Company’s limited operating history and recurring operating losses.

 

F-9 

 

 

GROUNDFLOOR FINANCE INC. AND SUBSIDIARIES

 

Notes to Consolidated Financial Statements

 

The Consolidated Financial Statements do not include any adjustments that might result from the outcome of the uncertainties described in the Consolidated Financial Statements. In addition, the Consolidated Financial Statements do not include any adjustments relating to the recoverability and classification of assets nor the amount and classification of liabilities that might result should the Company be unable to continue as a going concern.

 

Use of Estimates

 

The preparation of Consolidated Financial Statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the Consolidated Financial Statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

 

Revenue Recognition

 

Revenue primarily results from fees earned on the loans to the Developers (the “Loans”). Fees include “Origination fees” and “Loan servicing revenue” which are paid by the Developers.

 

Effective for 2019, the Company adopted Accounting Standards Update (“ASU”) 2014-09, Revenue from Contracts with Customers (“Topic 606”). Topic 606 supersedes the revenue requirements in ASC Topic 605, Revenue Recognition. The Company has evaluated the impact of this accounting standard on its Consolidated Financial Statements and concluded that the Company’s contracts with customers continue to fall within the scope of existing guidance. Servicing fees, origination fees, net interest income, and gains and losses on sales of loans remain within the scope of ASC topic 310—Receivables or ASC topic 860—Transfers and Servicing. Consequently, there was no transition adjustment required on the accompanying financial statements for adopting Topic 606.

 

Origination Fees

 

“Origination fees” are paid by the Developers for the work performed to facilitate the Loans. The amount to be charged is a percentage based upon the terms of the Loan, including grade, rate, term, and other factors. Origination fees range from 1.0% to 5.0% of the principal amount of a Loan. The origination fee is paid when the Loan is issued to the Developer and deducted from the gross proceeds distributed. A Loan is considered issued when formal closing has occurred and funds have transferred to the Developer’s account, which occurs through an Electronic Funds Transfer (“EFT”).

 

The origination fees are recognized as revenue ratably over the term of the Loan, while direct costs to originate Loans are recorded as expenses as incurred.

 

Loan Servicing Revenue

 

Loan servicing revenue is recognized by the Company, upon recovery, for costs incurred in servicing the Developer’s Loan, including managing payments to and from Developers and payments to Investors. The Company records loan servicing revenue as a component of revenue when collected. Direct costs to service Loans are recorded as expenses as incurred.

 

Whole Loan Sales

 

Under loan sale agreements, the Company sells all of its rights, title, and interest in certain loans. At the time of such sales, the Company may simultaneously enter into loan servicing agreements under which it acquires the right to service the loans. The Company calculates a gain or loss on a whole loan sale based on the net proceeds from the whole loan sale, less the carrying value of the loans sold. All unamortized origination fees incurred in the origination process are recognized directly to Consolidated Statements of Operations and recorded to “Origination fees”. For sold loans for which the Company retains servicing rights, the Company compares the expected contractual benefits of servicing to the expected costs of servicing to determine whether a servicing asset or servicing liability arises from the transaction. No servicing rights assets or liabilities have been identified for the years ended December 31, 2020 and 2019.

 

F-10 

 

 

GROUNDFLOOR FINANCE INC. AND SUBSIDIARIES

 

Notes to Consolidated Financial Statements

 

Interest Income on Loans to Developers and Interest Expense on Limited Recourse Obligations

 

The Company recognizes “Interest income” on Loans and “Interest expense” on the corresponding Investor Georgia Notes (if issued by Groundfloor GA) or LROs (if issued by Groundfloor Finance Inc.) using the accrual method based on the stated interest rate to the extent the Company believes it to be collectable. For the purposes of these Consolidated Financial Statements, “Limited recourse obligations, net” refers to both Georgia Notes and LROs. Georgia Notes are securities that the Company has issued through its previously registered Georgia-exclusive securities offering, which has since been terminated. LROs are the Company’s currently registered securities. Both Georgia Notes and LROs represent similar obligations of the Company.

 

Cash and Cash Equivalents

 

The Company considers all highly liquid investments purchased with an original maturity of three months or less to be cash equivalents. The Company had no cash equivalents as of December 31, 2020 and 2019. From time to time, the Company could maintain cash deposits in excess of federally insured limits. The Company believes credit risk related to its cash and cash equivalents to be minimal.

 

Each investor’s escrow account receives Federal Deposit Insurance Corporation (“FDIC”) insurance coverage on cash balances subject to normal FDIC coverage rules. Investor funds, whether committed through a LRO or held in escrow, are not included as a part of the Company’s cash balance.

 

Loans to Developers and Limited Recourse Obligations

 

“Loans to developers, net” are originally recorded at outstanding principal, then subsequently increased as additional draws are disbursed to developers. “Limited recourse obligation, net” are originally recorded at the original principal amount committed by investors, net of funds not yet to be disbursed to developers on the underlying loans, then subsequently increased as those funds are disbursed to developers. Funds committed by investors in LROs but not yet disbursed to developers on the underlying Loans were approximately $20,868,000 and $8,218,000, as of December 31, 2020 and 2019, respectively. These funds are netted against gross balances of approximately $66,794,000 and $61,343,000 as of December 31, 2020 and 2019, respectively, on the accompanying Consolidated Balance Sheets.

 

The interest rate associated with a Loan is the same as the interest rate associated with the corresponding Georgia Notes or LROs.

 

The Company’s obligation to pay principal and interest on a Georgia Note or LRO is equal to the pro rata portion of the total principal and interest payments collected from the corresponding Loan. The Company obtains a lien against the property being financed and attempts reasonable collection efforts upon the default of a Loan. The Company is not responsible for repaying “Limited recourse obligations, net” associated with uncollectable “Loans to developers, net.” Amounts collected related to a defaulted Loan are returned to the Investors based on their pro rata portion of the corresponding Georgia Notes or LROs, if applicable, less collection costs incurred by the Company.

 

The Investors may remit funds through the Company’s online portal prior to the actual Loan being closed. These funds are held in an escrow account controlled by a major bank and are not recognized as an LRO until the Loan is closed and funds are transferred to the Developer, which occurs through an EFT transaction. Each Investor escrow account receives FDIC insurance coverage on cash balances subject to normal FDIC coverage rules.

 

The Loan and corresponding LROs are recorded on the Company’s Consolidated Balance Sheets to “Loans to developers, net” and “Limited recourse obligations, net”, respectively, once the Loan has closed and funds have been disbursed to borrowers. Loans are considered closed after the promissory note for that Loan has been signed and the security interest has been perfected.

 

F-11 

 

 

GROUNDFLOOR FINANCE INC. AND SUBSIDIARIES

 

Notes to Consolidated Financial Statements

 

Nonaccrual and Past Due Loans

 

Accrual of interest on “Loans to developers, net” and corresponding “Limited recourse obligations, net” is discontinued when, in management’s opinion, the collection of the interest income appears doubtful. “Interest income” and “Interest expense” on the “Loans to developers, net” and the corresponding “Limited recourse obligations, net” are discontinued and placed on nonaccrual status at the time the Loan is 90 days delinquent unless the Loan is well secured and in process of collection. A Loan may also be placed on nonaccrual status when, in management’s judgment, the collection of the interest income appears doubtful based on the status of the underlying development project, even if the Loan is not yet 90 days delinquent. Loans may be returned to accrual status when all the principal and interest amounts contractually due are brought current and future payments are reasonably assured.

 

The “Loans to developers, net” and corresponding “Limited recourse obligations, net” are charged off to the extent principal or interest is deemed uncollectible. All interest accrued but later charged off for “Loans to developers, net” and “Limited recourse obligations, net” is reversed against “Interest income” and the corresponding LROs recorded “Interest expense”.

 

Impaired Loans

 

Loans are considered impaired when, based on current information and events, it is probable the Company will be unable to collect all amounts due in accordance with the original contractual terms of the loan agreements. Impaired loans include Loans on nonaccrual status. When determining if the Company will be unable to collect all principal and interest payments due in accordance with the contractual terms of the loan agreement, the Company considers the borrower’s capacity to pay, which includes such factors as the borrower’s current financial position, an analysis of global cash flow sufficient to pay all debt obligations and an evaluation of secondary sources of repayment, such as collateral value and guarantor support. The Company individually assesses for impairment all nonaccrual Loans and all Loans in fundamental default. If a Loan is deemed impaired, a specific valuation allowance is allocated, if necessary, so that the Loan is reported net, at the present value of estimated future cash flows using the Loan’s existing rate or at the fair value of collateral if repayment is expected solely from the collateral. Interest payments on impaired loans are typically applied to principal unless collectability of the principal amount is reasonably assured, in which case interest is recognized on a cash basis.

 

Allowance for Uncollectable Loans and Undeliverable Limited Recourse Obligations

 

Payments to holders of Georgia Notes or LROs, as applicable, depend on the payments received on the corresponding Loans; a reduction or increase of the expected future payments on Loans will decrease or increase the reserve for the associated Georgia Notes or LROs. The Company recognizes a reserve for uncollectable Loans and corresponding reserve for undeliverable Georgia Notes or LROs in an amount equal to the estimated probable losses net of recoveries. The allowance is based on management’s estimates and analysis of historical bad debt experience, existing economic conditions, current loan aging schedules, and expected future write-offs, as well as an assessment of specific, identifiable Developer accounts considered at risk or uncollectible. Expected losses and actual charge-offs on Loans are offset to the extent that the Loans are financed by Georgia Notes or LROs, as applicable, that effectively absorb the related Loan losses.

 

“Loans to developers, net” are presented net of a reserve for doubtful accounts of approximately $3,360,000 and $2,720,000 as of December 31, 2020 and 2019, respectively. “Limited recourse obligations, net” are presented net of a reserve for doubtful accounts of approximately $4,304,000 and $2,720,000 as of December 31, 2020 and 2019, respectively.

 

Other Real Estate Owned

 

Foreclosed assets acquired through or in lieu of loan foreclosure are held for sale and are initially recorded at fair value less estimated selling costs. Any write-down to fair value at the time of transfer to foreclosed assets is charged to the allowance for loan losses. Subsequent to foreclosure, valuations are periodically performed by management and the assets are carried at the lower of carrying amount or fair value less cost to sell. Costs of improvements are capitalized up to the fair value of the property, whereas costs relating to holding foreclosed assets and subsequent adjustments to the value are charged to operations.

 

F-12 

 

 

GROUNDFLOOR FINANCE INC. AND SUBSIDIARIES

 

Notes to Consolidated Financial Statements

 

Software Development Costs

 

Software development costs primarily include internal and external labor expenses incurred to develop the software that powers the Company’s website. Certain costs incurred during the application development stage are capitalized based on specific activities tracked, while costs incurred during the preliminary project stage and post-implementation and operation stages are expensed as incurred. Capitalized software development costs are amortized over the estimated useful life of the related software. The Company recognized approximately $448,000 and $415,000 in expense related to amortization of software development costs for the years ended December 31, 2020 and 2019, respectively.

 

Property and Equipment

 

Property and equipment consists of computer equipment, furniture and fixtures, leasehold improvements, and office equipment. Property and equipment is stated at historical cost less accumulated depreciation. Depreciation is computed using the straight-line method over the estimated useful lives of the assets. Leasehold improvements are depreciated over the shorter of the life of the lease or the useful life of the improvements. Upon retirement or sale, the cost of assets disposed of and the related accumulated depreciation are removed from the accounts, and any resulting gain or loss is credited or charged to income. Repairs and maintenance costs are expensed as incurred.

 

Depreciation is computed using the following estimated useful lives:

 

Computer equipment   3 years 
Software and website development costs   3 years 
Office equipment   5 years 
Furniture and fixtures   5 years 
Leasehold improvements   5 years 

 

Impairment of Long-Lived Assets

 

Long-lived assets, such as computer equipment, office equipment, furniture and fixtures, intangible assets, and software and website development costs, are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Recoverability of assets to be held and used is measured by a comparison of the carrying amount of the asset to estimated undiscounted future cash flows expected to be generated by the asset. If the carrying amount of the asset exceeds its estimated future cash flows, an impairment charge is recognized for an amount by which the carrying amount of the asset exceeds the fair value of the asset.

 

Intangible Assets

 

Intangible assets consist of Company’s domain names. Intangible assets are being amortized over a 15-year period, their estimated useful lives, on a straight-line basis. The Company recognized approximately $2,000 in amortization expense during the years ended December 31, 2020 and 2019.

 

Equity Offering Costs

 

The Company accounts for offering costs in accordance with Accounting Standard Codification (“ASC”), ASC 340, Other Assets and Deferred Costs. Prior to the completion of an offering, offering costs will be capitalized as deferred offering costs on the balance sheet. The deferred offering costs will be charged to stockholders’ equity upon the completion of an offering or to expense if the offering is not completed.

 

F-13 

 

 

GROUNDFLOOR FINANCE INC. AND SUBSIDIARIES

 

Notes to Consolidated Financial Statements

 

For the year ended December 31, 2019, offering costs of approximately $41,000 incurred in connection with the 2019 Common Stock Offering were deferred and charged against the gross proceeds of the offering in stockholders’ equity.

 

For the year ended December 31, 2020, offering costs of approximately $233,000 incurred in connection with the issuance of Series B preferred stock were deferred and charged against the gross proceeds of the offering in stockholders’ equity. Offering costs incurred in connection with the 2020 Common Stock Offering were not material and were expensed as incurred.

 

Deferred Revenue

 

Deferred revenue consists of origination fee payments received in advance of revenue recognized.

 

Advertising Costs

 

The cost of advertising is expensed as incurred and presented within “Marketing and promotions” expenses in the Consolidated Statements of Operations. The Company incurred approximately $607,000 and $274,000 in advertising costs during the years ended December 31, 2020 and 2019, respectively.

 

Rent Expense

 

The Company recognizes rent expense on a straight-line basis over the term of the lease. The difference between rent expense and rent paid is recorded as deferred rent in the Consolidated Balance Sheets as a component of “Other liabilities”. Rent expense is presented within “General and administrative” expenses in the Consolidated Statements of Operations. The Company incurred approximately $309,000 and $248,000 in rent expense for office facilities during the years ended December 31, 2020 and 2019, respectively.

 

Share-Based Compensation

 

The Company recognizes as expense non-cash compensation for all stock-based awards for which vesting is considered probable. Such stock-based awards include stock options and warrants issued as compensation to employees and nonemployees. Non-cash compensation is measured at fair value on the grant date and expensed ratably over the vesting term. The fair value of each stock option and warrant is estimated using the Black-Scholes option pricing model.

 

Income Taxes

 

Deferred tax assets and liabilities are determined based on the temporary differences between the Consolidated Financial Statements carrying amounts and the tax basis of assets and liabilities using the enacted tax rates in effect in the years in which the differences are expected to reverse. In estimating future tax consequences, all expected future events are considered other than enactment of changes in the tax law or rates.

 

The Company may recognize the tax benefit from an uncertain tax position only if it is more likely than not that the tax position will be sustained on examination by the taxing authorities based on the technical merits of the position. The tax benefits recognized in the Consolidated Financial Statements from such a position should be measured based on the largest benefit that has a greater than 50% likelihood of being realized upon ultimate settlement.

 

The determination of recording or releasing income tax valuation allowance is made, in part, pursuant to an assessment performed by management regarding the likelihood that the Company will generate future taxable income against which benefits of its deferred tax assets may or may not be realized. This assessment requires management to exercise significant judgment and make estimates with respect to its ability to generate taxable income in future periods.

 

NOTE 2: RECENT ACCOUNTING PRONOUNCEMENTS

 

In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842) (“ASU 2016-02”), which requires lessees to recognize most leases on the balance sheet as a lease liability and corresponding right-of-use asset. Further clarification of this guidance was subsequently provided by FASB through the issuance of ASU 2018-10, Codification Improvements to Topic 842, Leases (“ASU 2018-10”), in July 2018 and the issuance of ASU 2018-11, Leases (Topic 842): Targeted Improvements (“ASU 2018-11”), in July 2018. While the guidance in these pronouncements was originally scheduled to take effect for the Company for the year ending December 31, 2020, the FASB subsequently issued ASU 2020-05 in June 2020 deferring the effective date. The guidance in these pronouncements will therefore be effective for the Company for the year ending December 31, 2022. The Company is currently evaluating the effect of this guidance on the Company’s Consolidated Financial Statements.

 

F-14 

 

 

GROUNDFLOOR FINANCE INC. AND SUBSIDIARIES

 

Notes to Consolidated Financial Statements

 

In June 2016, the FASB issued ASU 2016-13, Financial Instruments – Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments (“ASU 2016-13”). The FASB subsequently issued a number of pronouncements amending or clarifying ASU 2016-13, including the following: in November 2018, Accounting Standards Update 2018-19, Codification Improvements to Topic 326, Financial Instruments—Credit Losses (“ASU 2018-19”); in May 2019, Accounting Standards Update 2019-05, Financial Instruments—Credit Losses (Topic 326): Targeted Transition Relief (“ASU 2019-05”); in November 2019, Financial Instruments—Credit Losses (Topic 326), Derivatives and Hedging (Topic 815), and Leases (Topic 842): Effective Dates (“ASU 2019-10”); and in November 2019, Codification Improvements to Topic 326, Financial Instruments—Credit Losses (“ASU 2019-11”). ASU 2016-13 and the subsequent related pronouncements significantly change how entities will measure credit losses for most financial assets and certain other instruments that are not measured at fair value through net income. The standard will replace the current incurred loss approach with an expected loss model, referred to as the current expected credit loss (“CECL”) model. The new standard will apply to financial assets subject to credit losses and measured at amortized cost and certain off-balance-sheet credit exposures, which include, but are not limited to, loans, leases, held-to-maturity securities, loan commitments and financial guarantees. ASU 2016-13 simplifies the accounting for purchased credit-impaired debt securities and loans and expands the disclosure requirements regarding an entity’s assumptions, models, and methods for estimating the allowance for loan and lease losses. In addition, entities will need to disclose the amortized cost balance for each class of financial asset by credit quality indicator, disaggregated by the year of origination. For public business entities that meet the definition of an SEC filer, ASU 2016-13 is effective for interim and annual reporting periods beginning after December 15, 2019; for all other public business entities, the guidance is effective for fiscal years beginning after December 15, 2020; for all other entities (private companies, not-for-profit organizations, and employee benefit plans), the guidance is effective for fiscal years beginning after December 15, 2021, including interim periods within those fiscal years. Upon adoption, ASU 2016-13 provides for a modified retrospective transition by means of a cumulative-effect adjustment to equity as of the beginning of the period in which the guidance is effective. The Company is currently evaluating the impact this standard will have on the Company’s Consolidated Financial Statements.

 

In December 2019, the FASB issued Accounting Standards Update 2019-12, Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes (“ASU 2019-12”). The amendments in this update simplify the accounting for income taxes by removing certain exceptions in Topic 740 and introducing other changes intended to clarify and improve existing guidance. For public business entities, the amendments are effective for fiscal years beginning after December 15, 2020; for all other entities, the amendments are effective for fiscal years beginning after December 15, 2021. The Company is currently evaluating the impact that the implementation of this standard will have on the Company’s Consolidated Financial Statements.

 

In August 2020, the FASB issued Accounting Standards Update 2020-06, Debt—Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging—Contracts in Entity’s Own Equity (Subtopic 815-40) (“ASU 2020-06”). The amendments in this update simplify the accounting for convertible interest by removing the requirement to separately account for an embedded conversion feature from the host contract in certain instances. The guidance are effective for fiscal years beginning after December 15, 2023, with early adoption permitted. The Company is evaluating the impact that the implementation of this standard will have on the Company’s Consolidated Financial Statements.

 

NOTE 3: LOANS TO DEVELOPERS, NET

 

The Company provides financing to borrowers for real estate-related loans. Real estate loans include loans for unoccupied single family or multifamily renovations and new constructions costing between $30,000 and $2,000,000 over six months to a year.

 

F-15 

 

 

GROUNDFLOOR FINANCE INC. AND SUBSIDIARIES

 

Notes to Consolidated Financial Statements

 

The following table presents the carrying amount of “Loans to developers, net” by letter grade and performance state as of December 31, 2020 and 2019, respectively:

 

    Current     Workout     Fundamental
Default		     Total  
Loan grades:                                
A   $ 2,553,516     $ 87,500     $ 612,546     $ 3,253,562  
B     6,340,810       1,344,234       5,103,005       12,788,049  
C     23,559,735       6,183,234       7,548,514       37,291,483  
D     9,226,680       1,656,123       1,403,046       12,285,849  
E     77,895       686,525       192,011       956,431  
F     -       -       -       -  
G     -       -       -       -  
Gross amount as of December 31, 2020   $ 41,758,636     $ 9,957,616     $ 14,859,122     $ 66,575,374  
Less: Allowance for loan losses                             (3,360,000 )
Carrying amount as of December 31, 2020                           $ 63,215,374  

 

    Current     Workout     Fundamental
Default		     Total  
Loan grades:                                
A   $ 5,356,177     $ 115,256     $ 350,000     $ 5,821,433  
B     15,610,763       1,992,394       528,367       18,131,524  
C     33,204,844       2,147,561       3,879,901       39,232,306  
D     10,624,400       314,319       1,717,097       12,655,816  
E     640,916       -       90,000       730,916  
F     -       -       -       -  
G     -       -       -       -  
Gross amount as of December 31, 2019   $ 65,437,100     $ 4,569,530     $ 6,565,365     $ 76,571,996  
Less: Allowance for loan losses                             (2,720,000 )
Carrying amount as of December 31, 2019                           $ 73,851,996  

 

Nonaccrual and Past Due Loans

 

A Loan is placed on nonaccrual status when, in management’s judgment, the collection of the interest income appears doubtful. Loans placed in nonaccrual status stop accruing interest and, if collectability of interest is sufficiently doubtful, “Interest receivable on loans to developers” that has been accrued and is subsequently determined to have doubtful collectability is charged to “Interest income” and the corresponding “Accrued interest on limited recourse obligations” that has been accrued and is subsequently determined to have doubtful collectability is charged to “Interest expense.” Interest income on Loans that are classified as nonaccrual is subsequently applied to principal until the Loans are returned to accrual status. Loans are returned to accrual status when all the principal and interest amounts contractually due are brought current and future payments are reasonably assured. As of December 31, 2020, the Company placed Loans of approximately $14,859,122 recorded to “Loans to developers, net” on nonaccrual status.

 

F-16 

 

 

GROUNDFLOOR FINANCE INC. AND SUBSIDIARIES

 

Notes to Consolidated Financial Statements

 

The following table presents an analysis of past due Loans as of December 31, 2020 and 2019:

 

    Carrying
Amount		     Allowance for
Loan Losses		     Loans to
Developers,
net		  
Aging schedule:                        
Current   $ 35,134,514       350,000       34,784,514  
Less than 90 days past due     10,994,226       270,000       10,724,226  
More than 90 days past due     20,446,634       2,740,000       17,706,634  
Total as of December 31, 2020   $ 66,575,374       3,360,000       63,215,374  

 

    Carrying
Amount		     Allowance for
Loan Losses		     Loans to
Developers,
net		  
Aging schedule:                        
Current   $ 65,884,046     $ 730,000     $ 65,154,046  
Less than 90 days past due     5,792,759       240,000       5,552,759  
More than 90 days past due     4,895,191       1,750,000       3,145,996  
Total as of December 31, 2019   $ 76,571,996     $ 2,720,000     $ 73,851,996  

 

Impaired Loans

 

The following is a summary of information pertaining to impaired loans as of December 31, 2020:

 

    Balance  
Nonaccrual loans   $ 14,859,122  
Fundamental default not included above     -  
Total impaired loans     14,859,122  
         
Interest income recognized on impaired loans   $ 1,251,441  

 

The following table presents an analysis of information pertaining to impaired loans as of December 31, 2020:

 

    Balance  
Principal loan balance   $ 22,328,583  
         
Related allowance   $ 2,908,000  
Average recorded investment   $ 174,000  

 

The following is a summary of information pertaining to impaired loans as of December 31, 2019:

 

    Balance  
Nonaccrual loans   $ 6,565,365  
Fundamental default not included above     -  
Total impaired loans     6,565,365  
         
Interest income recognized on impaired loans   $ 173,000  

 

F-17 

 

 

GROUNDFLOOR FINANCE INC. AND SUBSIDIARIES

 

Notes to Consolidated Financial Statements

 

The following table presents an analysis of information pertaining to impaired loans as of December 31, 2019:

 

    Balance  
Principal loan balance   $ 6,565,365  
         
Related allowance   $ 2,020,000  
Average recorded investment   $ 205,000  

 

Credit Quality Monitoring

 

The Company uses three performance states to better monitor the credit quality of outstanding loans. Outstanding loans are characterized as follows:

 

Current - This status indicates that no events of default have occurred, all payment obligations have been met or none are yet triggered.

 

Workout - This status indicates there has been one or more payment defaults on the Loan and the Company has negotiated a modification of the original terms that does not amount to a fundamental default.

 

Fundamental Default - This status indicates a Loan has defaulted and there is a chance the Company will not be able to collect 100% of the principal amount of the Loan by the extended payment date of the corresponding Georgia Notes or LROs.

 

The following table presents “Loans to developers, net” by performance state as of December 31, 2020 and 2019:

 

    Carrying
Amount		     Allowance
for Loan
Losses		     Loans to
Developers,
Net		  
Performance states:                        
Current   $ 41,758,636       420,000       41,338,636  
Workout     9,957,616       220,000       9,737,616  
Fundamental default     14,859,122       2,720,000       12,139,122  
Total as of December 31, 2020   $ 66,575,374       3,360,000       63,215,374  

 

    Carrying
Amount		     Allowance
for Loan
Losses		     Loans to
Developers,
Net		  
Performance states:                        
Current   $ 65,437,101     $ 630,000     $ 64,807,101  
Workout     4,569,530       70,000       4,499,530  
Fundamental default     6,565,365       2,020,000       4,545,365  
Total as of December 31, 2019   $ 76,571,996     $ 2,720,000     $ 73,851,996  

 

F-18 

 

 

GROUNDFLOOR FINANCE INC. AND SUBSIDIARIES

 

Notes to Consolidated Financial Statements

 

Allowance for Loan Losses

 

The following table details activity in the allowance for loan losses for the years ended December 31, 2020 and 2019:

 

    Balance  
Balance, December 31, 2019   $ 2,720,000  
Allowance for loan loss     948,676  
Loans charged off     (308,676 )
Outstanding as of December 31, 2020   $ 3,360,000  
Period-end amount allocated to:        
Loans evaluated individually for impairment   $ 2,240,000  
Loans evaluated collectively for impairment     560,000  
General population of loans, other than those specifically identified     560,000  
Balance, December 31, 2020   $ 3,360,000  
Loans:        
Loans evaluated individually for impairment   $ 3,814,468  
Loans evaluated collectively for impairment     11,205,286  
General population of loans, other than those specifically identified     51,555,620  
Balance, December 31, 2020   $ 66,575,374  

 

    Balance  
Balance, December 31, 2018   $ 500,000  
Allowance for loan loss     2,750,000  
Loans charged off     (530,000 )
Outstanding as of December 31, 2019   $ 2,720,000  
Period-end amount allocated to:        
Loans evaluated individually for impairment     1,860,000  
Loans evaluated collectively for impairment     160,000  
General population of loans, other than those specifically identified     700,000  
Balance, December 31, 2019   $ 2,720,000  
Loans:        
Loans evaluated individually for impairment     3,456,044  
Loans evaluated collectively for impairment     3,109,321  
General population of loans, other than those specifically identified     70,006,631  
Balance, December 31, 2019   $ 76,571,996  

 

F-19 

 

 

GROUNDFLOOR FINANCE INC. AND SUBSIDIARIES

 

Notes to Consolidated Financial Statements

 

NOTE 4: OTHER CURRENT ASSETS

 

“Other current assets” at December 31, 2020 and 2019, consists of the following:

 

    2020     2019  
Other real estate owned (1)   $ 2,154,477     $ 210,962  
Due from related party (2)     434,784       417,381  
Rent deposit, current portion     21,302       21,302  
Advance agreements (3)     -       288,000  
Other     21,239       -  
Other current assets   $ 2,631,801     $ 937,645  

 

(1) During the year ended December 31, 2020 the Company transferred $4,912,985 from “Loans to developers, net” to “Other current assets”. Other real estate owned met the held for sale criteria and have been recorded at the lower of carrying amount or fair value less cost to sell. There was no impact to the Company’s Consolidated Statements of Operations from this transfer. The Company recorded a decrease of approximately $944,442 to “Loans to developers, net” and an offsetting decrease to “Limited recourse obligations, net”.

 

(2) Loan and accrued interest receivable from related parties. Refer to Note 11 – Related Party Transactions.

 

(3) Advance agreements for the purchase of 2019 Subordinated Convertible Notes. Refer to Note 7 – Debt.

 

NOTE 5: PROPERTY, EQUIPMENT, SOFTWARE, WEBSITE AND INTANGIBLE ASSETS, NET

 

“Property, equipment, software, website development costs, and intangible assets, net” at December 31, 2020 and 2019, consists of the following:

 

    2020     2019  
Software and website development costs   $ 2,434,075     $ 1,874,742  
Computer equipment     137,514       118,476  
Leasehold improvements     9,838       22,367  
Furniture and fixtures     206,290       171,828  
Office equipment     46,405       46,405  
Domain names     30,000       30,000  
Total property, equipment, software, website and intangible assets     2,864,122       2,263,818  
Less: accumulated depreciation and amortization     (1,807,545 )     (1,292,211 )
Property, equipment, software, website and intangible assets, net   $ 1,056,577     $ 971,607  

 

Depreciation and amortization expense on “Property, equipment, intangible assets, software, and website development costs, net” for the years ended December 31, 2020 and 2019 was approximately $524,000 and $482,000, respectively. Amortization of software and website development costs is included as a component of “Development” and depreciation of property, equipment, and intangible assets is included as a component of “General and administrative” in the Consolidated Statements of Operations.

 

F-20 

 

 

GROUNDFLOOR FINANCE INC. AND SUBSIDIARIES

 

Notes to Consolidated Financial Statements

 

NOTE 6: ACCOUNTS PAYABLE AND ACCRUED EXPENSES

 

“Accounts payable and accrued expenses” at December 31, 2020 and 2019, consists of the following:

 

    2020     2019  
Deferred loan origination fees   $ 1,115,067     $ 1,441,471  
Trade accounts payable     478,712       509,443  
Accrued interest expense (1)     333,900       302,490  
Funded loans-in-process (2)     147,100       2,097,512  
Accrued employee compensation     104,551       87,949  
Other     10,477       163,251  
Accounts payable and accrued expenses   $ 2,189,807     $ 4,602,116  

 

  (1) “Accrued interest expense” includes interest related to corporate debt instruments as described in Note 7.

 

  (2) Certain whole loans originated by the Company in 2019 and subsequently sold to institutional buyers were purchased at the contractual loan amount, which comprises both the principal amount disbursed to borrowers prior to the loan sale and any loan-in-process principal yet to be disbursed. “Funded loans in process” represents the obligation of the Company to disburse loan-in-process funds received from institutional buyers to borrowers for the underlying loans as draws are requested and approved.

 

NOTE 7: DEBT

 

Revolving Credit Facility

 

On November 1, 2016, the Company’s wholly owned subsidiary, Groundfloor Holdings GA, LLC, as borrower, entered into a revolving credit facility (the “Revolver”) with Revolver Capital, LLC. The credit agreement initially provided for revolving loans up to a maximum aggregate principal amount of $1,500,000, proceeds to be used for bridge funding of underlying loans pending approval from the United States Securities and Exchange Commission. Subsequent amendments to the credit agreement in 2016 and 2017 increased the aggregate commitments under the credit facility to $4,500,000.

 

On April 4, 2018, the Credit Agreement dated as of November 1, 2016, as amended by the First Amendment as of November 11, 2016, the Second Amendment dated as of February 22, 2017 and the Third Amendment dated as of April 7, 2017, was assigned to ACM Alamosa DA LLC. The Company and the lender agreed to amend and restate the Original Credit Agreement in its entirety. The other terms of the credit facility remain unchanged.

 

On September 18, 2018, the Company increased the Revolving Credit Commitments thereunder from $4,500,000 to $5,500,000. In connection with the increase the Company paid a $10,000 commitment fee, which was capitalized and amortized over a twelve-month period. The other terms of the credit facility remain unchanged.

 

On August 8, 2019, the Company increased the Revolving Credit Commitments thereunder from $5,500,000 to $8,500,000. In connection with the increase the Company paid a $30,000 commitment fee, which is capitalized and amortized over a twelve-month period. The other terms of the credit facility remain unchanged.

 

On October 1, 2019, the Company increased the Revolving Credit Commitments thereunder from $8,500,000 to $10,500,000. In connection with the increase the Company paid a $20,000 commitment fee, which is capitalized and amortized over a twelve-month period. The other terms of the credit facility remain unchanged.

 

The Revolver maturity date was November 2, 2020. The Company had the option to request and the lender may, in its sole discretion, elect to extend the maturity date. The base contractual interest rate applicable throughout the years ended December 31, 2020 and 2019, was the greater of 10.0 percent per annum and the weighted average underlying loan rate with respect to all underlying borrower loans funded under the Revolver. In the event that a loan funded using proceeds from the Revolver is not repaid in full on or before the repayment date for that loan, the contractual interest rate increases to the greater of 15.0 percent per annum or the underlying loan rate plus 3.0 percent.

 

F-21 

 

 

GROUNDFLOOR FINANCE INC. AND SUBSIDIARIES

 

Notes to Consolidated Financial Statements

 

In March 2020, in connection with the novel coronavirus pandemic and the related tightening of credit markets, GROUNDFLOOR’s creditor informed the Company that it would cease funding of draws on the Revolver for an undefined period of time and replace the lost financing by expanding on other existing sources of lending capital, most importantly the GROUNDFLOOR Notes program. In response, the Company developed a plan to repay the outstanding principal and accrued interest on the Revolver. The outstanding principal and accrued interest on the Revolver were repaid in full in June 2020. and no outstanding balance remains as of December 31, 2020.

 

As of December 31, 2020 and 2019, respectively, the Company had approximately $0 and $7,000 of available borrowings, and $0 and $10,493,000 outstanding under the Revolver as presented within Revolving credit facility on the Consolidated Balance Sheets. As of December 31, 2020 and 2019, respectively the Company reflected approximately $0 and $33,000 of deferred financing costs related to the Revolver as a reduction to the Revolving credit facility in the Consolidated Balance Sheets. Amortization of these costs was approximately $33,000 and $24,000 for the years ended December 31, 2020 and 2019, respectively, presented as a component of “Interest expense” in the Consolidated Statements of Operations. Accrued interest on the Revolver, presented within “Accounts payable and accrued expenses” in the Company’s Consolidated Balance Sheets, was approximately $0 and $112,000 at December 31, 2020 and 2019, respectively.

 

2019 Subordinated Convertible Notes

 

From September 2019 to December 2019, the Company issued subordinated convertible notes (the “2019 Subordinated Convertible Notes”) to Investors for total proceeds of $3,607,000. The 2019 Subordinated Convertible Notes bear interest at the rate of 10% per annum. The outstanding principal and all accrued but unpaid interest is due and payable on the earlier of August 30, 2021, or the consummation of a sale of the Company by consolidation, merger, change of majority ownership, or sale or other disposition of all or substantially all of the assets of the Company (the “Maturity Date”). In the event of a closing of a preferred stock financing with gross proceeds of at least $8,000,000 (“Qualified Preferred Financing”) prior to the Maturity Date, the outstanding principal and all accrued but unpaid interest may be converted into shares of preferred stock issued in the financing at a price per share equal to 90% of the offering price per share in the Qualified Preferred Financing. At any time after six months after the issuance of a 2019 Subordinated Convertible Note, the investor may convert all or a portion of the outstanding principal and accrued interest into shares of common stock at 90% of the per share price of common stock at the time of conversion, as reasonably determined by the Board. The indebtedness represented by the 2019 Subordinated Convertible Notes is subordinated in all respects to the principal of (and premium, if any), unpaid interest on and amounts reimbursable, fees, expenses, costs of enforcement, and other amounts due in connection with the Revolver.

 

Because of the contractual right of noteholders to convert their holdings to common stock at a discount to fair value, the Company determined that the 2019 Subordinated Convertible Notes contain a beneficial conversion feature. The Company recognized this beneficial conversion feature as a debt discount and component of additional paid-in capital at the in-the-money amount of approximately $401,000 at the time of issuance. The discount is being amortized to interest expense until the earlier of maturity or exercise of the conversion option. For the years ended December 31, 2020 and 2019, respectively, approximately $242,000 and $32,000 was amortized to interest expense in the Consolidated Statements of Operations.

 

Certain investors in 2019 Subordinated Convertible Notes purchased their shares through the issuance of advance agreements to the Company (“Advances”). The Advances accrue interest at a rate of 10% per annum and are payable to the Company within an initial term of 30 days, with an investor option to extend the term by 30 days, after which the Advances begin accruing interest at a rate of 14% per annum. The funds advanced to the investors are subject to recourse by the Company against the investors. The Advances, with principal sum of $288,000 as of December 31, 2019, are recorded as a component of “Other current assets” in the Company’s Consolidated Balance Sheets. The Advances were paid in full during the year ended December 31, 2020.

 

F-22 

 

 

 

GROUNDFLOOR FINANCE INC. AND SUBSIDIARIES

 

Notes to Consolidated Financial Statements

 

In 2020, certain holders of 2019 Subordinated Convertible Notes converted their holdings into common stock or Series B preferred stock, at the discretion of the Noteholders. Additionally, as an incentive to convert, the Company granted all Noteholders a time-limited option to convert their holdings on more favorable terms than those specified in the contractual agreement. Pursuant to these terms, Noteholders converted $408,000 in principal and approximately $48,000 in accrued interest into 30,841 shares of common stock at a conversion price of $14.88, a 15% discount to the per share price of common stock at the time of conversion. Noteholders also converted $411,000 in principal and approximately $47,000 in accrued interest into 22,760 shares of Series B preferred stock at a conversion price of $16.41, a 10% discount to the offering price in the 2020 Series B Preferred Stock Offering, and into 5,528 shares of Series B preferred stock at a conversion price of $14.58, a 20% discount to the offering price in the 2020 Series B Preferred Stock Offering. Because these Noteholders converted their debt instruments to equity securities of the Company pursuant to an inducement offer, the Company also recognized an expense equal to the fair value of the securities transferred in the conversion in excess of the fair value of the securities issuable pursuant to the original conversion terms. Conversion inducement expense of approximately $42,000 is recognized in the Consolidated Statements of Operations as a component of “General and administrative”.

 

Principal of $2,788,000 and $3,607,000 on the 2019 Subordinated Convertible Notes, net of an unamortized discount of approximately $126,000 and $369,000, was outstanding as of December 31, 2020 and December 31, 2019, respectively. Accrued interest on the 2019 Subordinated Convertible Notes, presented within “Accounts payable and accrued expenses” in the Company’s Consolidated Balance Sheets, was approximately $334,000 and $69,000 as of December 31, 2020 and December 31, 2019.

 

GROUNDFLOOR Notes

 

During the years ended December 31, 2020 and 2019, the Company entered into various secured promissory notes, (the “GROUNDFLOOR Notes”), with accredited Investors. The GROUNDFLOOR Notes are used for the purpose of the Company to originate, buy, and service loans for the purpose of building, buying, or rehabilitating single family and multifamily structures, or buying land, for commercial purposes. The GROUNDFLOOR Notes are issued and secured by the assets of Groundfloor Real Estate 1 LLC, a wholly owned subsidiary of Groundfloor Finance, Inc. As collateral security for GROUNDFLOOR Notes, the Company granted first priority security interest in all the loan assets of its wholly owned subsidiary, Groundfloor Real Estate 1 LLC, subject to certain exceptions.

 

During the year ended December 31, 2019, there were 105 notes entered into with stated interest rates ranging from 3.0% to 8.0% and with terms ranging from 30 days to 12 months. During the year ended December 31, 2020, there were 116 notes entered into with stated interest rates ranging from 2.0% to 10.0% and with terms ranging from 30 days to 12 months. The principal sum of $18,978,000 and $6,840,000 remains outstanding as of December 31, 2020 and 2019, respectively, and is presented in “Short-term notes payable” on the Company’s Consolidated Balance Sheets.

 

Accrued interest on the GROUNDFLOOR Notes, presented within “Accounts payable and accrued expenses” in the Company’s Consolidated Balance Sheets, was approximately $326,000 and $114,000 at December 31, 2020 and 2019, respectively.

 

Other Short-term Notes Payable

 

On November 8, 2019, the Company entered into a short-term note agreement with an investor for a principal sum of $500,000. The note bears simple interest at a stated rate of 6.0% per annum. The outstanding principal and accrued interest were due and payable on February 6, 2020, 90 days from the date of issuance. As part of the issuance, the investor also received 500 detachable warrants for the purchase of common stock. The Company has allocated the proceeds of the note issuance between the debt instrument and the detachable warrants based on their relative fair values. The amount allocated to the warrants was classified as a component of stockholders’ equity and recorded as a debt discount in the Consolidated Balance Sheets, which will be amortized to interest expense over the term of the note. As of December 31, 2019, the outstanding principal of $500,000, net of an unamortized discount of approximately $2,000, are presented in “Short-term notes payable” on the Company’s Consolidated Balance Sheets. Accrued interest on the note, approximately $5,000 as of December 31, 2019, is presented in “Accounts payable and accrued expenses” in the Consolidated Balance Sheets. This note and accrued interest thereon was repaid in full in the year ended December 31, 2020.

 

F-23

 

 

GROUNDFLOOR FINANCE INC. AND SUBSIDIARIES

 

Notes to Consolidated Financial Statements

 

On December 19, 2019, the Company entered into a short-term note agreement with an investor for a principal sum of $500,000. The note bears simple interest at a stated rate of 13.5% per annum. The outstanding principal and accrued interest were due and payable on March 18, 2020, 90 days from the date of issuance. As of December 31, 2019, the outstanding principal of $500,000, net of an unamortized discount of approximately $1,000 related to debt issuance costs, are presented in “Short-term notes payable” on the Company’s Consolidated Balance Sheets. Accrued interest on the note, $2,000 as of December 31, 2019, is presented in “Accounts payable and accrued expenses” in the Consolidated Balance Sheets. This note and accrued interest thereon was repaid in full in the year ended December 31, 2020.

 

On December 20, 2019, the Company entered into a short-term note agreement with an investor for a principal sum of $250,000. The note bears simple interest at a stated annual rate of 6.0% per annum. The outstanding principal and accrued interest are due and payable on March 19, 2020, 90 days from the date of issuance. As part of the issuance, the investor also received 250 detachable warrants for the purchase of common stock. The Company has allocated the proceeds of the note issuance between the debt instrument and the detachable warrants based on their relative fair values. The amount allocated to the warrants was classified as a component of stockholders’ equity and recorded as a debt discount in the Consolidated Balance Sheets, which will be amortized to interest expense over the term of the note. As of December 31, 2019, the outstanding principal of $250,000, net of an unamortized discount of approximately $2,000, are presented in “Short-term notes payable” on the Company’s Consolidated Balance Sheets. Accrued interest on the note, approximately $500 as of December 31, 2019, is presented in “Accounts payable and accrued expenses” in the Consolidated Balance Sheets. This note and accrued interest thereon was repaid in full in the year ended December 31, 2020.

 

Paycheck Protection Program

 

In April 2020, the Company received a loan from Suntrust Bank in the amount of $829,100 under the Paycheck Protection Program (“PPP”), established by the Coronavirus Aid, Relief, and Economic Security Act (“CARES Act”). The PPP is sponsored by the U.S. Small Business Administration (“SBA”), and is providing small businesses – sole proprietors, independent contractors, and, with certain industry exceptions, businesses with fewer than 500 employees – the opportunity to apply for a loan of up to $10 million to cover up to eight weeks of payroll costs, including benefits. Funds may also be used to cover interest on mortgage obligations, leases, and utilities incurred or in place before February 15, 2020. Based on current SBA guidance, PPP loans can be forgiven as long as (i) loan proceeds are used for covered expenses, (ii) full-time employee headcount is maintained during the eight-week period covered by the PPP loan, (iii) compensation for employees who earned less than $100,000 on an annualized basis in 2019 is not reduced by more than 25% during the covered period and (iv) not more than 40% of the amount forgiven may be for non-payroll costs. The Company has used the PPP Loan proceeds to cover payroll costs, rent and utilities in accordance with the relevant terms and conditions of the CARES Act.

 

NOTE 8: STOCKHOLDERS’ Deficit

 

Capital Structure

 

Authorized Shares - As of December 31, 2020, the Company is authorized to issue 5,000,000 shares of no par value common stock and 1,316,181 shares of no par value preferred stock. The preferred stock has been designated as Series A Preferred Stock (the “Series A”), consisting of 747,385 shares, and Series Seed Preferred Stock (the “Series Seed”), consisting of 568,796 shares (collectively, “Preferred Stock”).

 

Common Stock Transactions

 

In February 2018, the Company launched an offering of its common stock under Tier 2 of Regulation A pursuant to an offering statement on Form 1-A qualified by the SEC (the “2018 Common Stock Offering”). The Company offered up to 500,000 shares of common stock at $10 per share, with a minimum investment of $100, or ten shares of common stock. The aggregate initial offering price of the common stock will not exceed $5,000,000 in any 12-month period, and there is no minimum offering amount. The Company may issue up to 30,000 additional bonus shares. The 2018 Common Stock Offering closed on July 31, 2018. During the 2018 Common Stock Offering, the Company issued 437,917 shares of common stock for gross proceeds of $4,228,700. The Company incurred offering costs of approximately $125,000 related to the 2018 Common Stock Offering.

 

F-24

 

 

GROUNDFLOOR FINANCE INC. AND SUBSIDIARIES

 

Notes to Consolidated Financial Statements

 

In conjunction with the 2018 Common Stock Offering, certain holders of Restated Subordinated Convertible Notes converted their outstanding principal and accrued interest into common stock at a contractually agreed upon 10% discount to the offered price. In 2018, approximately $278,000 in notes principal and accrued interest were converted into 30,847 shares of common stock. In 2019, approximately $1,289,000 in notes principal and accrued interest were converted into 143,223 shares of common stock.

 

In October 2018, the Company entered into a common stock purchase agreement for private placement of 125,000 shares of the Company’s common stock for gross proceeds of $1,500,000.

 

In January 2019, the Company launched an offering of its common stock under Tier 2 of Regulation A pursuant to an offering statement on Form 1-A qualified by the SEC (the “2019 Common Stock Offering”). The Company offered up to 900,000 shares of common stock at $15.00 per share, with a minimum investment of $150, or 10 shares of common stock. According to the terms of the offering statement, the aggregate initial offering price of the common stock will not exceed $13,500,000 in any 12-month period, and there is no minimum offering amount. The Company may issue up to 30,000 additional bonus shares through an incentive program available to investors who had provided a previous indication of interest in investing in the Company.

 

The 2019 Common Stock Offering closed on a rolling basis from January 2019 to July 2019. As a result of the offering, the Company received gross proceeds of approximately $3,115,000 in exchange for the issuance of 214,535 shares of common stock, including 6,800 bonus shares issued through the incentive program described above. The proceeds are presented in the Consolidated Balance Sheets as a component of stockholders’ equity, net of direct offering costs of approximately $42,000 incurred.

 

In conjunction with the 2019 Common Stock Offering, certain holders of Restated Subordinated Convertible Notes converted their outstanding principal and accrued interest into common stock at a contractually agreed upon 10% discount to the offered price. In 2019, approximately $60,000 in notes principal and accrued interest were converted into 4,440 shares of common stock.

 

In February 2020, the Company launched an offering of its common stock under Tier 2 of Regulation A pursuant to an offering statement on Form 1-A qualified by the SEC (the “2020 Common Stock Offering”). Participation in the 2020 Common Stock Offering was limited to existing shareholders. The Company offered shares of common stock at $17.50 per share, with a minimum investment of $175, or 10 shares of common stock. According to the terms of the offering statement, the aggregate initial offering price of the common stock will not exceed $5,000,000 in any 12-month period, and there is no minimum offering amount. As a result of the offering, the Company received gross proceeds of approximately $539,000 in exchange for the issuance of 30,794 shares of common stock.

 

Preferred Stock Transactions

 

Series A

 

During 2015, the Company issued 709,812 shares of Series A to Investors for total proceeds of $4,748,705. In conjunction with the equity issuance, the Company converted all outstanding promissory notes payable and accrued interest totaling $251,295 into 37,561 shares of Series A.

 

Series Seed

 

During 2015 and 2014, the Company issued 201,146 and 91,259 shares, respectively, to Investors for total proceeds of $1,047,000 and $475,000. In conjunction with the equity issuance in 2014, the Company converted all outstanding convertible notes payable and accrued interest totaling $1,098,388 into 276,391 shares of Series Seed.

 

F-25

 

 

GROUNDFLOOR FINANCE INC. AND SUBSIDIARIES

 

Notes to Consolidated Financial Statements

 

Series B

 

In July 2020, the Company launched an offering of 548,546 shares of Series B Preferred Stock at $18.23 per share (“Series B Preferred Stock Offering”). According to the terms of the offering statement, the aggregate initial offering price of the Series B Stock will not exceed $10,000,000 in any 12-month period, and the Company will not execute sales of any securities under Regulation A that aggregate more than $50,000,000 in any twelve-month period.

 

Since the launch of the offering, the Company has offered its Series B Stock on a continuous basis directly through the Company website, and also on the online platform utilized by SI Securities, LLC located at www.seedinvest.com, to both accredited and non-accredited investors.

 

As a result of the offering, the Company has as of December 31, 2020 received gross proceeds of approximately $2,912,000 in exchange for the issuance of 159,748 shares of Series B preferred stock, presented net of offering costs of $233,000 in the Consolidated Balance Sheets as a component of stockholders’ equity. Pursuant to the offering, certain holders of 2019 Subordinated Convertible Notes converted their holdings into Series B Preferred Stock as discussed in Note 7.

 

Voting - The holders of Preferred Stock are entitled to one vote for each share of common stock into which the preferred shares are convertible.

 

Liquidation - Upon any liquidation, dissolution, or winding up of the Company, the holders of Series A shall be entitled to be paid out of the assets of the Company available for distribution to its stockholders before any payment shall be made to the holders of common stock or Series Seed, an amount per share equal to the greater of: i) the Series A original issue price of $6.69 per share, plus any dividends declared but unpaid, and ii) such amount per share as would have been payable had all shares of Series A been converted into common stock immediately prior to such liquidation, dissolution, or winding up. If the available assets are insufficient to pay the holders of shares of Series A the full amount to which they shall be entitled, then all of the available assets shall be distributed to the holders of the Series A pro rata in accordance with their ownership thereof.

 

After payment in full of the Series A preference amount, the Series Seed stockholders are entitled to a liquidation preference equal to the greater of: i) the Series Seed original issue price of $5.205 per share, plus any dividends declared but unpaid, or ii) such amount per share as would have been payable had all shares of Series Seed been converted into common stock immediately prior to such liquidation, dissolution, or winding up. If the available assets are insufficient to pay the holders of shares of Series Seed the full amount to which they shall be entitled, then all of the available assets shall be distributed to the holders of the Series Seed pro rata in accordance with their ownership thereof. Any assets remaining after such preferential distribution shall be distributed to holders of the common stock.

 

After payment in full of the Series Seed preference amount, the Series B stockholders are entitled to a liquidation preference equal to the greater of: i) the Series B original issue price of $18.23 per share, plus any dividends declared but unpaid, or ii) such amount per share as would have been payable had all shares of Series Seed been converted into common stock immediately prior to such liquidation, dissolution, or winding up. If the available assets are insufficient to pay the holders of shares of Series Seed the full amount to which they shall be entitled, then all of the available assets shall be distributed to the holders of the Series Seed pro rata in accordance with their ownership thereof.

 

Any assets remaining after such preferential distribution shall be distributed to holders of the common stock.

 

Conversion - Shares of Preferred Stock are convertible into shares of common stock at the option of the holder at any time. The number of common stock shares for Preferred Stock can be determined by dividing the original issue price by the then-effective conversion price.

 

Mandatory Conversion - All outstanding shares of Preferred Stock shall automatically be converted into shares of common stock upon the closing of the sales of shares of common stock to the public, with gross proceeds to the Company of at least $20,000,000. All outstanding shares of Series A, Series Seed, and Series B Stock shall automatically be converted into shares of common stock by the date and time, or the occurrence of an event, specified by vote or written consent of the holders of at least a majority of the then outstanding shares of Series A, Series Seed, and Series B Stock, respectively, each voting as a single class.

 

F-26

 

 

GROUNDFLOOR FINANCE INC. AND SUBSIDIARIES

 

Notes to Consolidated Financial Statements

 

Dividends - All dividends shall be declared pro rata on the common stock and Preferred Stock on a pari passu basis according to the numbers of common stock held by such holders on an as converted basis.

 

NOTE 9: stock options and warrants

 

Stock Options

 

In August 2013, the Company adopted the 2013 Stock Option Plan (the “Plan”). The Plan provides incentives to eligible employees, officers, and directors in the form of incentive stock options, non-qualified stock options, and restricted stock awards. The Company has reserved a total of Plan of 400,000 shares of common stock for issuance under the Plan. Of these shares, 29,821 shares are available for future stock option grants as of December 31, 2020.

 

The Board of Directors has the authority to administer the Plan and determine, among other things, the interpretation of any provisions of the Plan, the eligible employees who are granted options, the number of options that may be granted, vesting schedules, and option exercise prices. The Company’s stock options have a contractual life not to exceed ten years. The Company issues new shares of common stock upon exercise of stock options.

 

Due to limited historical data, the Company estimates stock price volatility based on the actual volatility of comparable publicly traded companies over the expected life of the option. The expected term represents the average time that options that vest are expected to be outstanding. The expected term for options granted to non-employees is the contractual life. The risk-free rate is based on the United States Treasury yield curve for the expected life of the option.

 

Management used the Black-Scholes-Merton option pricing model to determine the fair value of options issued during the years ended December 31, 2020 and 2019.

 

The assumptions used to calculate the fair value of stock options granted are as follows:

 

For the Year Ended December 31, 2020  Non-
Employees		   Employees 
Estimated dividend yield   -%   -%
Expected stock price volatility   55.0    50.0%
Risk-free interest rate   1.52%    0.34 - 1.40 %
Expected life of options (in years)   10.0    6.25 
Weighted-average fair value per share  $11.28   $8.35 

  

For the Year Ended December 31, 2019  Non-
Employees		   Employees 
Estimated dividend yield                 -%   -%
Expected stock price volatility   55.0%   50.0%
Risk-free interest rate   1.9%   2.1%
Expected life of options (in years)   10.0    6.25 
Weighted-average fair value per share  $9.77   $7.54 

 

F-27

 

 

GROUNDFLOOR FINANCE INC. AND SUBSIDIARIES

 

Notes to Consolidated Financial Statements

 

The following summarizes the stock option activity for the years ended December 31, 2020 and 2019:

 

    Shares     Weighted-
Average
Exercise
Price		     Weighted-
Average
Remaining
Contractual
Term		    

Aggregate

Intrinsic
Value

  
Outstanding as of December 31, 2018     319,925     $ 4.40                  
Exercised     (7,937 )     2.19                  
Terminated     (50,030 )     5.52                  
Granted     62,250       15.00                  
Outstanding as of December 31, 2019     324,208     $ 6.25                  
Exercised     (1,568 )     2.48                  
Terminated     (53,608 )     11.70                  
Granted     101,147       17.50                  
Outstanding as of December 31, 2020     370,179       8.55       6.9       3,312,000  
Exercisable as of December 31, 2020     237,811       5.26       5.8       2,910,000  
Expected to vest after December 31, 2020     132,368       14.46       8.8       402,000  

 

The following table summarizes certain information about all stock options outstanding as of December 31, 2020:

 

Exercise Price   Number of Options
Outstanding		   Weighted-Average
Remaining
Contractual Life (In Years)		   Number of Options
Exercisable		 
$0.67    64,000    3.0    64,000 
 1.87    36,000    4.6    36,000 
 2.40    69,692    6.3    64,487 
 3.99    10,000    3.8    10,000 
 10.00    28,725    7.5    13,420 
 12.00    33,501    8.0    9,695 
 15.00    34,073    8.6    2,983 
 17.50    94,188    9.8    37,226 
      370,179         237,811 

 

As of December 31, 2020, there was approximately $723,000 of total unrecognized compensation cost related to stock option arrangements granted under the Plan. That cost is expected to be recognized over a weighted-average period of 2.9 years. The total intrinsic value of stock option awards exercised was approximately $24,000 during the fiscal year ended December 31, 2020.

 

The Company recorded approximately $59,000 and $3,000 in non-employee and $475,000 and $176,000 in employee share-based compensation expense during 2020 and 2019, respectively.

 

Warrants

 

The Company issued 10,550 warrants during the year ended December 31, 2019, for the purchase of common stock. The warrants are exercisable immediately at $2.40 or $15.00 with a contractual term of ten years. The estimated fair value of the warrants was approximately $140,000 when issued. The fair value was calculated using the Black-Scholes-Morton pricing model with the following weighted-average assumptions: risk-free interest rate of 2.5%, expected life of ten years, dividend yields of 0%, and volatility factor of 55.0%. These assumptions yielded a weighted average fair value of $13.27 per warrant.

 

F-28

 

 

GROUNDFLOOR FINANCE INC. AND SUBSIDIARIES

 

Notes to Consolidated Financial Statements

 

During the years ended December 31, 2020 and 2019, respectively, 0 and 9,800 warrants were issued in connection with the 2017 Note. These warrants were measured at fair value and recorded as a discount to “Long-term notes payable,” with a corresponding increase to “Additional paid-in capital.” The discount will be amortized to expense over the remaining term of the 2017 Note. Upon full repayment and retirement of the 2017 Note in 2019, any unamortized discount at the time of repayment was amortized. The Company recognized expense of approximately $223,000 related to amortization of the 2017 Note warrant discount for the year ended December 31, 2019, as a component of “General and administrative” in the Consolidated Statements of Operations.

 

The remaining 750 warrants issued in 2019 were issued were issued in conjunction with the issuance of short-term notes payable in November and December 2019. These warrants have been measured at fair value and recorded as a discount to “Short-term notes payable,” with a corresponding increase to “Additional paid-in capital.” The discount will be amortized to interest expense over the remaining term of the corresponding notes. The Company recognized expense of approximately $4,000 related to amortization of these warrant discounts for the year ended December 31, 2020.

 

None of the outstanding warrants have been exercised as of December 31, 2020.

 

NOTE 10: INCOME TAXES

 

Deferred income taxes reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. The components of the Company’s deferred income tax assets and liabilities as of December 31, 2020 and 2019, are as follows:

 

   2020   2019 
Deferred income tax assets and liabilities:          
Net operating loss carryforwards  $6,156,000   $5,141,000 
Accrued expenses   27,000    23,000 
Share-based compensation   142,000    141,000 
Accrued interest   130,000    203,000 
Research and development credit   152,000    25,000 
Depreciation and amortization   31,000    (37,000)
Valuation allowance   (6,638,000)   (5,496,000)
   $-   $- 

 

The Company has established a valuation allowance against its deferred tax assets due to the uncertainty surrounding the realization of such asset. The valuation allowance increased by approximately $1,142,000 and $832,000, respectively, during the years ended December 31, 2020 and 2019.

 

As of December 31, 2020, the Company has federal and state net operating loss carryforwards of approximately $24,480,000 available to offset future federal and state taxable income, which begin to expire in 2033 and 2028. In general, a corporation’s ability to utilize its NOL and research and development credit carryforwards may be substantially limited due to the ownership change limitations as required by Section 382 and 383 of the Internal Revenue Code of 1986, as amended (Code), as well as similar state provisions. The federal and state Section 382 and 383 limitations may limit the use of a portion of the Company’s domestic NOL and tax credit carryforwards. Further, a portion of the carryforwards may expire before being applied to reduce future income tax liabilities.

 

F-29

 

 

GROUNDFLOOR FINANCE INC. AND SUBSIDIARIES

 

Notes to Consolidated Financial Statements

 

Income taxes computed at the statutory federal income tax rate are reconciled to the provision for income tax expense for 2020 and 2019 as follows:

 

   2020   2019 
   Amount   % of Pre-
Tax
Earnings		   Amount   % of Pre-
Tax
Earnings		 
Income tax expense (benefit) at statutory rate  $(1,005,000)   (21.0)%  $(806,000)   (21.0)%
State taxes (net of federal benefit)   (222,000)   (4.6)%   (161,000)   (4.6)%
Non-deductible expenses   497,000    10.4%   135,000    (0.6)%
True-up adjustment for deferred items   (412,000)   (6.6)%   -    -%
Change in valuation allowance   958,000    21.8%   832,000    26.2%
Provision for income tax expense  $-    0.0%  $-    0.0%

 

The Company recognizes interest and penalties related to uncertain tax positions in the provision for income taxes. As of December 31, 2020 and 2019, the Company had no accrual related to uncertain tax positions.

 

NOTE 11: RELATED PARTY TRANSACTIONS

 

ISB Development Corp.

 

The Company issued a short-term note in November 2019 to ISB Development Corp., an entity owned and operated by a director of the Company, for a principal sum of $500,000. The short-term note and accrued interest thereon were repaid in full in 2020. See Note 7, under the heading “Other short-term notes payable,” for further discussion and disclosure related to the related party note.

 

Moma Walnut, LLC

 

In June 2019, the Company extended a fully collateralized loan to Moma Walnut, LLC, an entity that is owned and operated by a director of the Company. The loan has a principal amount of $400,000, bears interest at a stated rate of 5% per annum, and was initially due within 30 days. Terms were subsequently modified in August 2019 to increase the interest rate to 13% per annum and extend the maturity date to August 11, 2020. In September 2020, the terms were again amended to retroactively change the interest rate to 10% per annum and to require monthly interest payments. As of December 31, 2020 and 2019, the related party loan receivable and accrued interest thereon are presented in the Consolidated Balance Sheets as a component of “Other current assets” in the amount of $404,000 and $417,000, respectively.

 

Employee Loan

 

In November 2020, an employee of the Company was extended a loan in the amount of $30,000, bearing interest at a rate of 1% per annum. The loan matures on October 31, 2021. As of December 31, 2020, the related party loan receivable and accrued interest thereon are presented in the Consolidated Balance Sheets as a component of “Other current assets” in the amount of approximately $30,000.

 

NOTE 12: COMMITMENTS AND CONTINGENCIES

 

The Company has a noncancelable operating lease agreement for office space. The lease contains a renewal option within 67 months of the commencement date of September 2018. Additionally, the company amended the lease to acquire approximately 4,000 sq ft of new office space within the current building. Rent expense for operating leases, which has escalating rents over the term of the lease, is recorded on a straight-line basis over the minimum lease terms. Rent expense under the operating lease was approximately $309,000 and $248,000 as a component of “General and administrative” in the Consolidated Statements of Operations for the years ended December 31, 2020 and 2019, respectively.

 

F-30

 

 

GROUNDFLOOR FINANCE INC. AND SUBSIDIARIES

 

Notes to Consolidated Financial Statements

 

As of December 31, 2020, the approximate amounts of the annual future minimum lease payments under noncancelable operating leases obligations are as follows:

 

   Balance 
Years ending December 31,     
2021  $387,505 
2022   432,710 
2023   445,679 
2024   151,754 
2025   - 
   $1,417,648 

 

The Company is subject to legal proceedings which arise in the ordinary course of business.  In the opinion of the Company, the resolution of these matters will not have a material adverse impact on the Company’s consolidated financial position or results of operations.

 

NOTE 13: SUBSEQUENT EVENTS

 

In January 2021, the Company submitted an application for 100% loan forgiveness related to the loan received in 2020 through the Paycheck Protection Program. The application is pending as of the date of issuance of these financial statements.

 

As discussed in Note 7, in July 2020 the Company commenced an offering of Series B Stock on an online platform utilized by SI Securities, LLC, located at www.seedinvest.com, to both accredited and non-accredited investors. That offering extended into 2021 and continues to accept new investments as of the issuance date of these financial statements. Pursuant to that offering, from January 1, 2021 through the issuance date of these financial statements, the Company has received gross proceeds of approximately $701,000, net of issuance costs of approximately $56,000, in exchange for the issuance of 38,429 shares of Series B Stock.

 

F-31

 

 

Summary Financial Information

 

The following information updates and replaces the information in the section titled “Summary Financial Information” beginning on page [10] of the Offering Circular:

 

The unaudited condensed statements of operations data set forth below with respect to the twelve months ended December 31, 2020 and December 31, 2019 are derived from, and are qualified by reference to, the unaudited condensed consolidated financial statements included in this Offering Circular and should be read in conjunction with those unaudited condensed consolidated financial statements and notes thereto.

 

F-32

 

 

   Twelve Months Ended December 31, 
   2020   2019 
Non-interest revenue:          
Origination fees  $2,548,305   $2,748,150 
Loan servicing revenue   1,348,332    1,964,284 
Total non-interest revenue   3,896,637    4,712,434 
Net interest income:          
Interest income   7,597,436    6,323,801 
Interest expense   (6,042,535)   (4,633,122)
Net interest income   1,554,901    1,690,679 
Net revenue   5,451,538    6,403,113 
Cost of revenue   (611,436)   (779,756)
Gross profit   4,840,102    5,623,357 
Operating expenses:          
General and administrative   3,006,854    2,514,202 
Sales and customer support   2,457,720    2,939,149 
Development   1,205,399    1,125,071 
Regulatory   353,103    208,874 
Marketing and promotions   1,453,840    1,515,558 
Total operating expenses   8,476,916    8,302,854 
Loss from operations   (3,636,814)   (2,679,497)
Interest expense on corporate debt instruments   1,149,819    1,157,769 
Net loss  $(4,786,633)  $(3,837,266)

 

In Groundfloor’s audited consolidated financial statements for the year ended December 31, 2020, our auditors expressed in their opinion substantial doubt about our ability to continue as a going concern. Since Groundfloor’s inception, Groundfloor has financed its operations through debt and equity financings. Groundfloor intends to continue financing its activities and working capital needs largely from private financing from individual investors and venture capital firms until such time that funds provided by operations are sufficient to fund working capital requirements.

 

*          *          *

 

CAPITALIZATION

 

The following tables reflect Groundfloor’s capitalization as of December 31, 2020 (audited) and December 31, 2019 (audited). The tables are not adjusted to reflect any subsequent stock splits, stock dividends, recapitalizations or refinancings or the subsequent closings of any financings.

 

The historical data in the tables is derived from and should be read in conjunction with Groundfloor’s consolidated financial statements included in this Offering Circular. You should also read this table in conjunction with the section entitled “Management Discussion and Analysis.”

 

F-33

 

 

   Amounts
Outstanding as of
December 31, 2020		   Amounts
Outstanding as of
December 31, 2019		 
Stockholders’ Deficit:          
Common stock, no par value  $11,596,087   $10,564,771 
Preferred stock, no par value   10,716,618    7,571,526 
Additional paid-in capital   2,336,551    1,802,895 
Less: Stock subscription receivable   (560)   (560)
Accumulated deficit   (26,254,407)   (21,467,774)
Total stockholders’ deficit  $(1,605,711)  $(1,529,142)

 

 

MANAGEMENT DISCUSSION AND ANALYSIS

 

You should read the following discussion in conjunction with Groundfloor’s unaudited condensed consolidated financial statements and the related notes and the section entitled “Description of the Company’s Business” elsewhere in this Offering Circular. This discussion contains forward-looking statements that involve risks and uncertainties. Actual results and the timing of events may differ materially from those contained in these forward-looking statements due to a number of factors, including but not limited to those discussed in the section entitled “Risk Factors” and elsewhere in this Offering Circular.

 

Overview

 

Groundfloor Finance Inc. (“Groundfloor” or “Groundfloor Finance”) maintains and operates the Groundfloor Platform for use by us and Groundfloor subsidiaries to provide real estate development investment opportunities to the public. Groundfloor was originally organized as a North Carolina limited liability company under the name of Fomentum Labs LLC on January 28, 2013. Fomentum Labs LLC changed its name to Groundfloor LLC on April 26, 2013, and converted into a North Carolina corporation on July 26, 2013. In connection with this conversion, all equity interests in Groundfloor LLC were converted into shares of our common stock. In August 2014, Groundfloor converted into a Georgia corporation and changed its name to Groundfloor Finance Inc. The unaudited condensed consolidated financial statements include Groundfloor’s wholly-owned subsidiaries. Groundfloor Holdings GA, LLC is the holder of the Revolver, as defined in Note 7. Groundfloor Properties GA LLC was created for the purpose of financing real estate in Georgia. Groundfloor Real Estate 1 LLC, Groundfloor Real Estate 2 LLC, and Groundfloor Yield LLC were created for the purpose of financing real estate in any state. Groundfloor Real Estate, LLC is currently inactive and management does not have plans to use this entity in the near future.

 

Funding Loan Advances

 

To date, the Company has entered into the following financial arrangements designed to facilitate Loan advances.

 

In November 2016, the Company entered into the Revolver credit facility to fund Loan advances (as defined below). The terms of the credit facility are as follows: Interest accrues at the greater of 10.0% per annum or the weighted average annual interest rate of the Loans then held by Holdings which have been originated with proceeds from the credit facility. The revolving credit facility was originally limited to $1.5 million with an option to increase the limit to $15.0 million (under certain circumstances). In March 2020, in connection with the novel coronavirus pandemic and the related tightening of credit markets, GROUNDFLOOR’s creditor informed the Company that it would cease funding of draws on the Revolver for an undefined period of time and replace the lost financing by expanding on other existing sources of lending capital, most importantly the GROUNDFLOOR Notes program. In response, the Company developed a plan to repay the outstanding principal and accrued interest on the Revolver. The outstanding principal and accrued interest on the Revolver were repaid in full in June 2020 and no outstanding balance remains as of December 31, 2020.

 

F-34

 

 

On January 11, 2017, Groundfloor entered into the ISB Note (as defined below) for a principal sum of $1.0 million, which was subsequently increased to $2.0 million, for the purpose of using the proceeds for our loan advance program, but may use the proceeds for other purposes in our sole discretion. The outstanding principal and accrued interest on the ISB Note were repaid in full in September 2019.

 

Starting in November 2018 and continuing through 2020, Groundfloor entered into various GROUNDFLOOR Notes, secured promissory notes, with accredited investors. The GROUNDFLOOR Notes are used for the purpose of the Company to originate, buy, and service loans for the purpose of building, buying, or rehabilitating single family and multifamily structures, or buying land for commercial purposes. The principal outstanding as of December 31, 2020, was $18.9 million.

 

In November and December 2019, Groundfloor entered into various short-term, secured promissory notes with accredited investors. Proceeds from the notes are used by the Company for originating, buying, and servicing loans to developers for the purpose of building, buying, and rehabilitating single family and multifamily structures, or buying land for commercial purposes. The aggregate principal outstanding of these loans as of December 31, 2019, was $1.3 million; those loans were repaid in full at maturity during the twelve months ended December 31, 2020 and no balance remains outstanding as of December 31, 2020.

 

Financial Position and Operating History

 

In connection with their audit for the year ended December 31, 2020, our auditors expressed substantial doubt about our ability to continue as a going concern due to our losses and cash outflows from operations. To strengthen our financial position, Groundfloor have continued to raise additional funds through convertible debt and equity offerings.

 

Groundfloor has a limited operating history and have incurred a net loss since our inception. Our net loss was $4.8 million for the six months ended December 31, 2020. To date, Groundfloor has earned limited revenues from origination and servicing fees charged to borrowers in connection with the loans made by the Company and its wholly-owned subsidiaries GRE 1 and Groundfloor GA corresponding to the LROs and Georgia Notes. Groundfloor has funded our operations primarily with proceeds from our convertible debt and preferred stock issuances, which are described below under “Liquidity and Capital Resources”. Over time, Groundfloor expects that the number of borrowers and lenders, and the volume of loans originated through the Groundfloor Platform, will increase and generate increased revenue from borrower origination and servicing fees.

 

The proceeds from the sale of LROs described in this Offering Circular will not be used to directly finance our operations. Groundfloor will use the proceeds from sales of LROs exclusively to originate the Loans that correspond to the corresponding series of LROs sold to investors. However, Groundfloor collects origination and servicing fees on Loans Groundfloor is able to make to Developers, which Groundfloor recognizes as revenue. The more Loans Groundfloor is able to fund through the proceeds of our offerings, the more fee revenue Groundfloor will make. With increased fee revenue, our financial condition will improve. However, Groundfloor does not anticipate this increased fee revenue to be able to fully support our operations through the next twelve months.

 

Groundfloor’s operating plan calls for a continuation of the current strategy of raising equity and, in limited circumstances, debt financing to finance its operations until Groundfloor reach profitability and become cash-flow positive, which Groundfloor does not expect to occur before 2021. Groundfloor’s operating plan calls for significant investments in website development, security, investor sourcing, loan processing and marketing, and for several rounds of equity financing before Groundfloor reaches profitability.

 

To date, the company has raised funds for operations through multiple common stock, preferred stock, and convertible note fundraising rounds. In 2020, the company raised approximately $0.5 million in a 2020 Common Stock Offering and has, as of December 31, 2020, raised approximately $2.7 million in new operating capital through a Series B preferred stock offering. See “Liquidity and Capital Resources” below.

 

F-35

 

 

Critical Accounting Policies and Estimates

 

This discussion and analysis of our financial condition and results of operations are based on our consolidated financial statements, which Groundfloor has prepared in accordance with generally accepted accounting principles. The preparation of these consolidated financial statements requires us to make estimates and assumptions that affect the reported amount of assets and liabilities, disclosure of contingent assets and liabilities and the reported amounts of revenues and expenses. Management bases its estimates on historical experience and on various other factors it believes to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities. Actual results may differ from these estimates. Our significant accounting policies are more fully described in Note 1 to our consolidated financial statements included elsewhere in this Offering Circular.

 

Software and Website Development Costs

 

Internal use software and website development costs are capitalized when preliminary development efforts are successfully completed and it is probable that the project will be completed and the software will be used as intended. Internal use software and website development costs are amortized on a straight line basis over the project’s estimated useful life, generally three years. Capitalized internal use software development costs consist of fees paid to third-party consultants who are directly involved in development efforts. Costs related to preliminary project activities and post implementation activities, including training and maintenance, are expensed as incurred. Costs incurred for upgrades and enhancements that are considered to be probable to result in additional functionality are capitalized. Development costs of our website incurred in the preliminary stages of development are expensed as incurred. Once preliminary development efforts are successfully completed, internal and external costs, if direct and incremental, are capitalized until the software is substantially complete and ready for its intended use.

 

Share Based Compensation

 

Groundfloor accounts for share-based compensation using the fair value method of accounting which requires all such compensation to employees and nonemployees, including the grant of employee stock options, to be recognized in the income statement based on its fair value at the measurement date (generally the grant date). The expense associated with share-based compensation is recognized on a straight-line basis over the service period of each award.

 

Allowance for Uncollectable Loans and Undeliverable Limited Recourse Obligations

 

Payments to holders of Georgia Notes or LROs, as applicable, depend on the payments received on the corresponding Loans; a reduction or increase of the expected future payments on Loans will decrease or increase the reserve for the associated Georgia Notes or LROs. The Company recognizes a reserve for uncollectable Loans and corresponding reserve for undeliverable Georgia Notes or LROs in an amount equal to the estimated probable losses net of recoveries. The allowance is based on management’s estimates and analysis of historical bad debt experience, existing economic conditions, current loan aging schedules, and expected future write-offs, as well as an assessment of specific, identifiable Developer accounts considered at risk or uncollectible. Expected losses and actual charge-offs on Loans are offset to the extent that the Loans are financed by Georgia Notes or LROs, as applicable, that effectively absorb the related Loan losses.

 

Nonaccrual and Past Due Loans

 

Accrual of interest on “Loans to developers, net” and corresponding “Limited recourse obligations, net” is discontinued when, in management’s opinion, the collection of the interest income appears doubtful. “Interest income” and “Interest expense” on the “Loans to developers, net” and the corresponding “Limited recourse obligations, net” are discontinued and placed on nonaccrual status at the time the Loan is 90 days delinquent unless the Loan is well secured and in process of collection. A Loan may also be placed on nonaccrual status when, in management’s judgment, the collection of the interest income appears doubtful based on the status of the underlying development project, even if the Loan is not yet 90 days delinquent. Loans may be returned to accrual status when all the principal and interest amounts contractually due are brought current and future payments are reasonably assured.

 

The “Loans to developers, net” and corresponding “Limited recourse obligations, net” are charged off to the extent principal or interest is deemed uncollectible. All interest accrued but later charged off for “Loans to developers, net” and “Limited recourse obligations, net” is reversed against “Interest income” and the corresponding LROs recorded “Interest expense”.

 

F-36

 

 

Impaired Loans

 

Loans are considered impaired when, based on current information and events, it is probable the Company will be unable to collect all amounts due in accordance with the original contractual terms of the loan agreements. Impaired loans include loans on nonaccrual status. When determining if the Company will be unable to collect all principal and interest payments due in accordance with the contractual terms of the loan agreement, the Company considers the borrower’s capacity to pay, which includes such factors as the borrower’s current financial position, an analysis of global cash flow sufficient to pay all debt obligations and an evaluation of secondary sources of repayment, such as collateral value and guarantor support. The Company individually assesses for impairment all nonaccrual loans and all loans in fundamental default. The tables below include all loans deemed impaired, whether or not individually assessed for impairment. If a loan is deemed impaired, a specific valuation allowance is allocated, if necessary, so that the loan is reported net, at the present value of estimated future cash flows using the loan’s existing rate or at the fair value of collateral if repayment is expected solely from the collateral. Interest payments on impaired loans are typically applied to principal unless collectability of the principal amount is reasonably assured, in which case interest is recognized on a cash basis.

 

Provision for Income Taxes

 

Groundfloor accounts for income taxes using the asset and liability method. Under this method, deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amount of existing assets and liabilities and their respective tax bases and operating loss and tax credit carryforwards. A valuation allowance is recorded to reduce deferred tax assets to the amount that is more likely than not to be realized.

 

F-37

 

 

Results of Operations

 

Twelve Months Ended December 31, 2020 and 2019

 

   Twelve Months Ended
December 31,		 
   2020   2019 
Non-interest revenue:          
Origination fees  $2,548,305   $2,748,150 
Loan servicing revenue   1,348,332    1,964,284 
Total non-interest revenue   3,896,637    4,712,434 
Net interest income:          
Interest income   7,597,436    6,323,801 
Interest expense   (6,042,535)   (4,633,122)
Net interest income   1,554,901    1,690,679 
Net revenue   5,451,538    6,403,113 
Cost of revenue   (611,436)   (779,756)
Gross profit   4,840,102    5,623,357 
Operating expenses:          
General and administrative   3,006,854    2,514,202 
Sales and customer support   2,457,720    2,939,149 
Development   1,205,399    1,125,071 
Regulatory   353,103    208,874 
Marketing and promotions   1,453,840    1,515,558 
Total operating expenses   8,476,916    8,302,854 
Loss from operations   (3,636,814)   (2,679,497)
Interest expense on corporate debt instruments   1,149,819    1,157,769 
Net loss  $(4,786,633)  $(3,837,266)

 

Net Revenue

 

Net revenue for the twelve months ended December 31, 2020 and 2019 was $5.5 million and $6.4 million, respectively, a decrease of $0.9 million or 14.9%. The Company facilitated the origination of 380 and 646 developer loans during the twelve months ended December 31, 2020 and 2019, respectively. Origination fees and loan servicing revenue were earned related to the origination of these developer loans. Origination fees are determined by the term and credit risk of the developer loan and range from 1.0% to 6.0%. The fees are deducted from the loan proceeds at the time of issuance. Loan servicing revenue are fees incurred in servicing the developer’s loan. Additionally, Groundfloor incurred net interest income during the loan advance period. The decrease in net interest income is due to the decrease in the overall portfolio size. Groundfloor expects operating revenue to increase as its loan application and processing volume increases.

 

Gross Profit

 

Gross profit for the twelve months ended December 31, 2020 and 2019 was $4.8 million and $5.6 million, respectively, a decrease of $0.8 million or 13.9%. The decrease in gross profit was due primarily to a reduction in origination and servicing revenues, as the Company originated fewer loans in both units and total loan volume relative to the prior year. The decrease in origination volume is attributable to a drastic reduction in lending in the second fiscal quarter, attributable to pandemic-related circumstances. Cost of revenue consists primarily of payment processing and vendor costs associated with facilitating and servicing loans. Groundfloor expects gross profit to increase as its loan application and processing volume increases.

 

F-38

 

 

General and Administrative Expense

 

General and administrative expense for the twelve months ended December 31, 2020 and 2019, were $3.0 million and $2.5 million, respectively, an increase of $0.6 million or 20.0%. General and administrative expenses consists primarily of employee compensation cost, professional fees, consulting fees and rent expense. The increase was driven primarily by an increase in stock compensation expense and shifting of some key employee salaries to general and administrative expense to align with changes in their roles. Groundfloor expects general and administrative expense will continue to increase due to the planned investment in business infrastructure required to support its growth.

 

Sales and Customer Support

 

Sales and customer support expense for the twelve months ended December 31, 2020 and 2019, were $2.5 million and $3.0 million, respectively, a decrease of $0.5 million or 16.4%. Sales and customer support expense consists primarily of employee compensation cost. The decrease was primarily due to a decrease in compensation related to a reduction of headcount. Groundfloor expect sales and customer support expense will continue to increase due to the planned investment in customer acquisition and support required to support its growth.

 

Development Expense

 

Development expense for the twelve months ended December 31, 2020 and 2019, were $1.2 million and $1.1 million, respectively, an increase of $0.1 million or 7.1%. Development expense consists primarily of employee compensation cost and the cost of subcontractors who work on the development and maintenance of our website and lending platform. The increase was attributable to an increase in compensation cost as a result of new hiring and compensation adjustments. Groundfloor expects development expense will continue to increase due to the planned investments in our website and lending platform required to support our technology infrastructure as Groundfloor grows.

 

Regulatory Expense

 

Regulatory expense for the twelve months ended December 31, 2020 and 2019, were $0.4 million and $0.2 million, respectively, an increase of $0.2 million or 69.1%. Regulatory expense consists primarily of legal fees and compensation cost required to maintain SEC and other regulatory compliance. Groundfloor expects regulatory expense may increase due to the additional expense related to qualifying our offerings with the SEC, including our transition to Tier 2 under Regulation A, which will require complying with ongoing reporting requirements with the SEC and certain filing fees with applicable state regulatory authorities.

 

Marketing and Promotions Expense

 

Marketing and promotions expense for the twelve months ended December 31, 2020 and 2019, remained approximately constant at $1.5 million for both periods. A reduction in marketing aimed at attracting borrowers, a consequence of a reduction in lending activity, was approximately offset by an increase in marketing and advertising aimed at attracting new investors. Marketing and promotions expense consists primarily of consulting expense, compensation cost as well as promotional and advertising expense.

 

Interest Expense

 

Interest expense for the twelve months ended December 31, 2020 and 2019, excluding interest paid on limited recourse obligations and GROUNDFLOOR Notes, was $1.1 million and $1.2 million, respectively, a decrease of $0.1 million or $0.7%. The company incurred $0.5 million and $0.8 million in interest expense warehousing loans on the Revolver during the twelve months ended December 31, 2020 and 2019, respectively. Interest expense related to the 2019 Subordinated Convertible Notes (as defined below) of $0.6 million and $0.3 million was recognized during the twelve months ended December 31, 2020 and 2019, respectively.

 

F-39

 

 

Net Loss

 

Net loss for the twelve months ended December 31, 2020 and 2019 was $4.8 million and $3.8 million, respectively, a net loss increase of $1.0 million or 24.7%. The increase in the net loss was primarily attributable to a reduction in lending volume leading to a reduction in net revenue from $6.4 million to $5.4 million, with no significant reduction in operating costs.

 

Liquidity and Capital Resources

 

The audited condensed consolidated financial statements included in this Offering Circular have been prepared assuming that Groundfloor will continue as a going concern; however, the conditions discussed below raise substantial doubt about our ability to continue as a going concern. The audited condensed consolidated financial statements do not include any adjustments to reflect the possible future effects on the recoverability and classification of assets or the amounts and classifications of liabilities that may result should Groundfloor be unable to continue as a going concern.

 

Groundfloor incurred a net loss for the twelve months ended December 31, 2020 and 2019, and have an accumulated deficit as of December 31, 2020 of $26.2 million. Since our inception, Groundfloor have financed our operations through debt and equity financing from various sources. Groundfloor are dependent upon raising additional capital or seeking additional equity financing to fund our current operating plans for the foreseeable future. Failure to obtain sufficient equity financing and, ultimately, to achieve profitable operations and positive cash flows from operations could adversely affect our ability to achieve its business objectives and continue as a going concern. Further, there can be no assurance as to the availability or terms upon which the required financing and capital might be available.

 

   For the twelve
months ended
December 31,
2020		   For the twelve
months ended
December 31,
2019		 
Operating activities  $(4,889,069)  $(769,848)
Investing activities   4,211,763    (40,097,871)
Financing activities   407,282    39,957,827 
Net increase (decrease) in cash  $(270,024)  $629,804 

 

Net cash flows from operating activities for the twelve months ended December 31, 2020 and 2019, was $(4.9) million and $0.8 million, respectively. Net cash used in operating activities funded salaries, expense for contracted marketing, development and other professional service providers and expense related to sales and marketing initiatives.

 

Net cash flows from investing activities for the twelve months ended December 31, 2020 and 2019 was $4.2 million and $(40.1) million, respectively. Net cash used in investing activities primarily represents loan payments to developers offset by the repayment of loans to developers.

 

Net cash flows from financing activities for the twelve months ended December 31, 2020 and 2019 was $0.4 million and $39.9 million, respectively. Net cash provided by financing activities primarily represents proceeds from the issuance of GROUNDFLOOR Notes and LROs to investors through the Groundfloor Platform, and proceeds from equity offerings, offset by repayments of GROUNDFLOOR Notes and LROs to investors.

 

F-40

 

 

Groundfloor issued and sold 91,259 shares Series Seed Preferred Stock at an initial closing on December 5, 2014 (the “Series Seed Initial Closing”), for total proceeds of $475 thousand, pursuant to the Series Seed Preferred Stock Purchase Agreement (the “Series Seed Purchase Agreement”), dated December 5, 2014 between us and the investors named therein (the “Series Seed Investors”). In addition, at the Series Seed Initial, the entire unpaid principal and interest outstanding under certain previously-issued convertible promissory notes converted into 276,391 additional shares of Series Seed Preferred Stock. Groundfloor issued and sold an aggregate of 201,146 additional shares of Series Seed Preferred Stock, for total proceeds of $1.1 million, at subsequent closings on April 1, 2015, May 12, 2015 and August 31, 2015 (collectively, the “Series Seed Subsequent Closings” and together, with the Series Seed Initial Closing, the “Series Seed Financing”). Pursuant to the Series Seed Purchase Agreement, the Company sold each share of Series Seed Preferred Stock for $5.205 per share. In connection with the Series Seed Financing, Groundfloor also entered into an Investors’ Rights Agreement with the Series Seed Investors and certain holders of our common stock, which was subsequently amended and restated in connection with the Series A Financing. The shares of Series Seed Preferred Stock were offered and sold pursuant to the federal exemption from registration set forth in Rule 506 of Regulation D under the Securities Act. The Series Seed Financing terminated following the final Series Seed Subsequent Closing and Groundfloor does not intend to sell any additional shares of Series Seed Preferred Stock.

 

During November 2015, Groundfloor entered into promissory notes with investors for total proceeds of $250 thousand (the “2015 Bridge Notes”). The notes incur interest at the rate of 12% per annum. The outstanding principal and all accrued but unpaid interest was due and payable on the earlier of May 5, 2016 or the closing of an equity financing with gross proceeds of at least $4.3 million. The 2015 Bridge Notes and all accrued but unpaid interest thereunder were cancelled as consideration for 37,561 shares of Series A Preferred Stock in connection with the Series A Initial Closing. The notes were offered and sold pursuant to the federal exemption from registration set forth in Rule 506 of Regulation D under the Securities Act. The 2015 Bridge Notes Financing terminated with the closing of the Series A Financing.

 

In addition, Groundfloor issued and sold 709,812 shares of Series A Preferred Stock at an initial closing on November 24, 2015 and subsequent closings through December 2015, for total gross proceeds of approximately $4.7 million, pursuant to the Series A Preferred Stock Purchase Agreement. Pursuant to the Series A Purchase Agreement, the Company sold each share of Series A Preferred Stock for $6.69 per share. The shares of Series A Preferred Stock were offered and sold pursuant to the federal exemption from registration set forth in Rule 506 of Regulation D under the Securities Act. The Series A Financing terminated in December 2015 and Groundfloor does not intend to sell any additional shares of Series A Preferred Stock.

 

On November 1, 2016, Holdings, the Company’s wholly-owned subsidiary, as borrower, entered into a revolving credit facility (the “Revolver”) with Revolver Capital. The credit agreement (the “Credit Agreement”) provides for revolving loans up to a maximum aggregate principal amount of $1.5 million (the “Revolving Credit Commitments”). The Revolver will be used for bridge funding of underlying loans pending qualification from the SEC. The term of the Revolver was extended in October 2017 and will mature on April 4, 2019.

 

On November 11, 2016, the Company entered into a First Amendment to the Credit Agreement, which amended the Credit Agreement to increase the Revolving Credit Commitments thereunder from $1.5 million to $2.5 million. On December 21, 2016, the Company entered into a Second Amendment to the Credit Agreement, which amended the Credit Agreement to increase the Revolving Credit Commitments thereunder from $2.5 million to $3.5 million. On April 7, 2017, the Company entered into a Third Amendment to the Credit Agreement, which increased the Revolving Credit Commitments thereunder from $3.5 million to $4.5 million. The other terms of the credit facility remain unchanged.

 

On April 4, 2018, the Credit Agreement dated as of November 2, 2016, as amended by the First Amendment as of November 14, 2016, the Second Amendment dated as of February 22, 2017 and the Third Amendment dated as of April 7, 2017, was assigned to ACM Alamosa DA LLC. The Company and the lender agreed to amend and restate the Original Credit Agreement in its entirety. The other terms of the credit facility remain unchanged.

 

On September 18, 2018, the Company increased the Revolving Credit Commitments thereunder from $4,500,000 to $5,500,000. In connection with the increase the Company paid a $10,000 commitment fee, which is capitalized and amortized over a twelve-month period. The other terms of the credit facility remain unchanged.

 

On August 8, 2019, the Company increased the Revolving Credit Commitments thereunder from $5,500,000 to $8,500,000. In connection with the increase the Company paid a $30,000 commitment fee, which is capitalized and amortized over a twelve-month period. The other terms of the credit facility remain unchanged.

 

F-41

 

 

On October 1, 2019, the Company increased the Revolving Credit Commitments thereunder from $8,500,000 to $10,500,000. In connection with the increase the Company paid a $20,000 commitment fee, which is capitalized and amortized over a twelve-month period. The other terms of the credit facility remain unchanged.

 

In March 2020, in connection with the novel coronavirus pandemic and the related tightening of credit markets, GROUNDFLOOR’s creditor informed the Company that it would cease funding of draws on the Revolver for an undefined period of time and replace the lost financing by expanding on other existing sources of lending capital, most importantly the GROUNDFLOOR Notes program. In response, the Company developed a plan to repay the outstanding principal and accrued interest on the Revolver. The outstanding principal and accrued interest on the Revolver were repaid in full in June 2020 and no outstanding balance remains as of December 31, 2020.

 

On January 11, 2017, Groundfloor entered into the ISB Note in favor of ISB for a principal sum of $1.0 million. Groundfloor paid to ISB an origination fee of $10 thousand concurrently with the funding by ISB of the principal of the ISB Note. Groundfloor subsequently entered into an amendment to the ISB Note extending the repayment schedule in return for a $5 thousand amendment fee, a second amendment increasing the principal amount outstanding to $2.0 million for a $30 thousand amendment fee, a third amendment further extending the repayment schedule among other terms described below in return for a $10 thousand amendment fee, and a fourth amendment further extending the repayment schedule among other terms described below for a $10 thousand amendment fee.

 

The ISB Note incurs interest at the rate of 8% per annum from January 11, 2017 until September 30, 2017 and 14% per annum from October 1, 2017 until payment in full of the ISB Note, in each case calculated on the basis of a 360-day year for the actual number of days elapsed. The ISB Note must be repaid as follows: (i) $50,000, plus any accrued but unpaid interest thereon, commencing on April 30, 2019, and each month thereafter, (ii) $1,000,000, plus any accrued but unpaid interest thereon, is due and payable on September 30, 2019, and (iii) any remaining outstanding principal amount, plus any remaining accrued but unpaid interest, is due and payable on December 31, 2020. As of the date hereof, the principal sum was paid in full and the note is no longer outstanding.

 

The ISB Note includes certain financial covenants related to the Company’s quarterly financial results and operating capital. The ISB Note is subject to customary event of default provisions. Upon the occurrence of any event of default, the interest rate under the ISB Note shall increase by 7%. As collateral security for the ISB Note, Groundfloor granted to ISB a first priority security interest in all of its assets, subject to certain exceptions. Among other things, the security interest specifically excludes (i) any assets serving as collateral for the Company’s credit facility with Revolver Capital; (ii) any Loans for which a series of LROs has been issued, regardless of whether such Loans and corresponding series of LROs have been originated and issued by us or one of our subsidiaries; and (iii) the equity interest in any subsidiary formed by us for the sole purpose of issuing Loans and corresponding series of LROs.

 

In connection with the third amendment to the ISB Note, the Company agreed to issue to ISB a warrant for the purchase of shares of our common stock on the first day of each quarter commencing on October 1, 2017 until the ISB Note is repaid in full for the purchase of the following number of shares: (i) for each quarter until and including the first quarter of 2019, 4,000 shares of common stock; (ii) for the second quarter of 2019, 3,500 shares of common stock, (iii) for the third quarter of 2019, 2,300 shares of common stock; and (iv) for the fourth quarter of 2019, 1,100 shares of common stock.

 

On April 1, 2019, the 2017 Note was amended and restated for a fee of $10,000, to be deferred and amortized over the life of the 2017 Note. The stated interest rate under the amended and restated promissory note and security agreement (“Restated Note”) was increased to 14%. Under the terms of the Restated Note, $50,000 of the principal amount plus any accrued but unpaid interest thereon was due and payable commencing on April 30, 2019, and each month thereafter; $1.0 million of the principal amount plus any accrued but unpaid interest was due and payable on September 30, 2019; and any remaining outstanding principal and accrued interest was due and payable on December 31, 2020. The agreement states that the Company may prepay the 2017 Note without premium or penalty.

 

F-42

 

 

In 2019, the Company made five payments of principal and accrued interest as outlined in the Restated Note agreement. The Company then prepaid the outstanding principal on the Restated Note in full, with accrued interest, on September 24, 2019.

 

As of December 31, 2019, there was no remaining balance outstanding on the Company’s Consolidated Balance Sheets. Amortization of deferred financing costs related to the 2017 ISB Note was $25,000 for the year ended December 31, 2019. Amortization of the related debt discount was $223,000 for the year ended December 31, 2019.

 

From March 2017 to December 2017, Groundfloor issued subordinated convertible notes (the “Subordinated Convertible Notes”) to investors for total proceeds of $2.1 million (the “2017 Note Financing”). On October 27, 2017, the Company entered into amendments to the outstanding Subordinated Convertible Notes and related Subordinated Convertible Promissory Note Purchase Agreement raising the principal amount of Subordinated Convertible Notes that may be sold to $2.0 million, extending the maturity date, and allowing the Subordinated Convertible Notes, at the option of the holders, to convert outstanding principal and accrued but unpaid interest into shares of the Company’s common stock as described below. In November 2017, Groundfloor issued Subordinated Convertible Notes to investors for additional proceeds of $675 thousand. Furthermore, in December 2017, Groundfloor oversubscribed and issued Subordinated Convertible Notes to investors for additional proceeds of $550 thousand. The notes incur interest at the rate of 8% per annum. The outstanding principal and all accrued but unpaid interest is due and payable on the earlier of September 30, 2019 or the consummation of a sale of the Company by consolidation, merger, change of majority ownership, or sale or other disposition of all or substantially all of the assets of the Company (the “Maturity Date”). In the event of a closing of a preferred stock financing with gross proceeds of at least $8.0 million (“Qualified Preferred Financing”) prior to the Maturity Date, the outstanding principal and all accrued but unpaid interest would become automatically converted into shares of our preferred stock issued in the financing at a price per share equal to 75% of the price per share of the preferred stock financing. In the event of a closing of a common stock financing under Regulation A with gross proceeds of at least $3.0 million (“Qualified Common Financing”) prior to the Maturity Date, then each holder may elect, in its discretion, to convert the outstanding principal and all accrued but unpaid interest into shares of our common stock issued in the financing at a price per share equal to 90% of the price per share of the common stock financing. The indebtedness represented by the Subordinated Notes is subordinated in all respects to the principal of (and premium, if any), unpaid interest on and amounts reimbursable, fees, expenses, costs of enforcement, and other amounts due in connection with the Revolver and ISB Note.

 

On February 9, 2018, Groundfloor launched an offering of our common stock under Tier 2 of Regulation A pursuant to an offering statement on Form 1-A qualified by the SEC (the “2018 Common Stock Offering”). As described in this Offering Circular, Groundfloor is offering up to 500,000 shares of our common stock at $10 per share, with a minimum investment of $100, or 10 shares of common stock. The aggregate initial offering price of our common stock will not exceed $5,000,000 in any 12-month period, and there is no minimum offering amount. Groundfloor is also offering a Bonus Share Program where Groundfloor may issue up to 30,000 additional bonus shares of our common stock pursuant to the terms of this Offering Circular. As of December 31, 2018, Groundfloor issued 437,917 shares of common stock in the 2018 Common Stock Offering for $4.2 million in proceeds.

 

On October 12, 2018, the Company entered into a common stock purchase agreement for private placement of 125,000 shares of the Company’s common stock for proceeds of $1.5 million.

 

In January 2019, the Company launched an offering of its common stock under Tier 2 of Regulation A pursuant to an offering statement on Form 1-A qualified by the SEC (the “2019 Common Stock Offering”). The Company offered up to 900,000 shares of common stock at $15.00 per share, with a minimum investment of $150, or 10 shares of common stock. According to the terms of the offering statement, the aggregate initial offering price of the common stock will not exceed $13,500,000 in any 12-month period, and there is no minimum offering amount. The Company may issue up to 30,000 additional bonus shares through an incentive program available to investors who had provided a previous indication of interest in investing in the Company.

 

F-43

 

 

The 2019 Common Stock Offering closed on a rolling basis from January 2019 to July 2019. As a result of the offering, the Company received gross proceeds of $3.1 million in exchange for the issuance of 214,535 shares of common stock, including 6,800 bonus shares issued through the incentive program described above.

 

In conjunction with the 2019 Common Stock Offering, certain holders of Restated Subordinated Convertible Notes converted their outstanding principal and accrued interest into common stock at a contractually agreed upon 10% discount to the offered price. In 2019, $60,000 in notes principal and accrued interest were converted into 4,440 shares of common stock.

 

From September 2019 to December 2019, the Company issued subordinated convertible notes (the “2019 Subordinated Convertible Notes”) to Investors for total proceeds of $3.6 million. The 2019 Subordinated Convertible Notes bear interest at the rate of 10% per annum. The outstanding principal and all accrued but unpaid interest is due and payable on the earlier of August 30, 2021, or the consummation of a sale of the Company by consolidation, merger, change of majority ownership, or sale or other disposition of all or substantially all of the assets of the Company (the “Maturity Date”). In the event of a closing of a preferred stock financing with gross proceeds of at least $8.0 million (“Qualified Preferred Financing”) prior to the Maturity Date, the outstanding principal and all accrued but unpaid interest may be converted into shares of preferred stock issued in the financing at a price per share equal to 90% of the offering price per share in the Qualified Preferred Financing. At any time after six months after the issuance of a 2019 Subordinated Convertible Note, the investor may convert all or a portion of the outstanding principal and accrued interest into shares of common stock at 90% of the per share price of common stock at the time of conversion, as reasonably determined by the Board. The indebtedness represented by the 2019 Subordinated Convertible Notes is subordinated in all respects to the principal of (and premium, if any), unpaid interest on and amounts reimbursable, fees, expenses, costs of enforcement, and other amounts due in connection with the Revolver.

 

Because of the contractual right of noteholders to convert their holdings to common stock at a discount to fair value, the Company determined that the 2019 Subordinated Convertible Notes contain a beneficial conversion feature. The Company recognized this beneficial conversion feature as a debt discount and component of additional paid-in capital at the in-the-money amount of $0.4 million at the time of issuance. The discount is being amortized to interest expense until the earlier of maturity or exercise of the conversion option.

 

In February 2020, the Company launched an offering of its common stock under Tier 2 of Regulation A pursuant to an offering statement on Form 1-A qualified by the SEC (the “2020 Common Stock Offering”). Participation in the 2020 Common Stock Offering was limited to existing shareholders. The Company offered shares of common stock at $17.50 per share, with a minimum investment of $175, or 10 shares of common stock. As a result of the offering, the Company received gross proceeds of approximately $0.5 million in exchange for the issuance of 30,794 shares of common stock.

 

In April 2020, the Company obtained an $829,100 loan under the Paycheck Protection Program (“PPP”). The Company used the PPP Loan proceeds to cover payroll costs, rent and utilities in accordance with the relevant terms and conditions of the CARES Act.

 

In July 2020, the Company launched an offering of 548,546 shares of Series B Preferred Stock at $18.23 per share (“Series B Preferred Stock Offering”). As a result of the offering, the Company has as of December 31, 2020 received gross proceeds of approximately $2.7 million in exchange for the issuance of 159,748 shares of Series B preferred stock. The Series B Preferred Stock Offering remains open and accepting new investment as of December 31, 2020.

 

Groundfloor has incurred losses since its inception, and Groundfloor expects it will continue to incur losses for the foreseeable future. Groundfloor requires cash to meet its operating expenses and for capital expenditures. To date, Groundfloor has funded its cash requirements with proceeds from its convertible note and preferred stock issuances. Groundfloor anticipate that it will continue to incur substantial net losses as it grows the Groundfloor Platform. Groundfloor does not have any committed external source of funds, except as described above. To the extent our capital resources are insufficient to meet its future capital requirements, Groundfloor will need to finance its cash needs through public or private equity offerings or debt financings. Additional equity or debt financing may not be available on acceptable terms, if at all. On October 30, 2017, Groundfloor filed an offering statement on Form 1-A with the SEC for a proposed offering of its common stock. On February 9, 2018, Groundfloor’s offering statement on Form 1-A was qualified to issue Groundfloor common stock.

 

F-44

 

 

Plan of Operation

 

Prior to September 2015, Groundfloor’s operations were limited to issuing Georgia Notes solely in Georgia to Georgia residents pursuant to an intrastate crowdfunding exemption from registration under the Securities Act and qualification under Georgia law. On September 7, 2015, the SEC qualified Groundfloor’s first offering statement on Form 1-A covering seven separate series of LROs corresponding to the same number of Projects in eight states and the District of Columbia. Subsequently, Groundfloor has not issued, and do not intend to issue in the future, any additional Georgia Notes. Since that time, Groundfloor has qualified two additional offering statements on Form 1-A in addition to an offering statement on Form 1-A qualified for GRE 1, its wholly-owned subsidiary, in each case under Tier 1 of Regulation A. In January 2018, Groundfloor’s offering statement relating to the offer and sale of limited recourse obligations (the “LRO Offering Circular”) was qualified by the SEC under Tier 2 of Regulation A, raising the annual aggregate amount of LROs which Groundfloor may offer and sell to $50 million, less any other securities sold by Groundfloor under Regulation A (including pursuant to this Offering Circular). Groundfloor has filed, and intends to continue to file, post-qualification amendments to the LRO Offering Circular on a regular basis to include additional series of LROs. Groundfloor expect to expand the number of states in which Groundfloor offers and sells LROs during the next 12 months. With this increased geographic footprint, Groundfloor expects that the number of borrowers and corresponding investors, and the volume of loans originated through the Groundfloor Platform, will increase and generate increased revenue from borrower origination and servicing fees.

 

As the volume of Groundfloor loans and corresponding offerings increase, Groundfloor plans to continue the current strategy of raising equity and, in limited circumstances, debt financing to finance our operations until Groundfloor reaches profitability and becomes cash-flow positive, which Groundfloor does not expect to occur before 2021. Future equity or debt offerings by Groundfloor will be necessary to fund the significant investments in website development, security, investor sourcing, loan processing and marketing necessary to reach profitability. Groundfloor expects to hire more staff to support its expected growth in operations and to invest heavily in marketing throughout the next year.

 

Off-Balance Sheet Arrangements

 

We do not engage in any off-balance sheet financing activities. We do not have any interest in entities referred to as variable interest entities, which include special purpose entities and other structured finance entities.

 

 

 

PART III — EXHIBITS

 

Exhibit Index

 

Exhibit
Number		   Exhibit Description
(hyperlink)		   Filed
Herewith		   Form   File No   Exhibit   Filing Date
1.1   Agreement dated February 14, 2020, by and between Groundfloor Finance Inc. and SI Securities, LLC       1-A   024-11188   1.1   April 3, 2020
                         
2.1   Form of Groundfloor Finance Inc. Third Amended and Restated Articles of Incorporation       1-A/A   024-11188   2.1   June 8, 2020
                         
2.2   Groundfloor Finance Inc. Bylaws       1-A/A   024-10440   2.2   July 1, 2015
                         
3.1   Amended and Restated Investors’ Rights Agreement       1-A/A   024-10496   3.1   November 25, 2015
                         
3.2   Form of Preferred Stock Voting Agreement       1-A/A   024-10758   3.2   February 7, 2018
                         
3.3   Common Stock Voting Agreement       1-A/A   024-10758   3.3   February 7, 2018
                         
3.4   Common Stock Subscription Agreement       1-A/A   024-10758   3.4   February 7, 2018
                         
4.1   Form of Series B Stock Subscription Agreement       1-A/A   024-11188   4.1    June 8, 2020
                         
4.2   Form of Series B Stock Investors’ Rights Agreement       1-A/A   024-11188   4.2    June 8, 2020
                         
6.1   Executive Employment Agreement with Brian Dally dated November 19, 2014       1-A/A   024-10440   6.1   July 1, 2015
                         
6.2   Executive Employment Agreement with Nikhil Bhargava dated November 19, 2014       1-A/A   024-10440   6.2   July 1, 2015
                         
6.3   2013 Stock Option Plan       1-A/A   024-10440   6.6   July 1, 2015
                         
6.4   Option Award Agreement for Michael Olander Jr.       1-A/A   024-10440   6.8   July 1, 2015
                         
6.5   Option Award Agreement for Richard Tuley       1-A   024-10488   6.11   October 7, 2015
                         
6.6   Option Award Agreement for Bruce Boehm       1-A   024-10488    6.12   October 7, 2015
                         
6.7   Series Seed Preferred Stock Purchase Agreement       1-A/A   024-10440   3.1   July 1, 2015
                         
6.8   Series A Preferred Stock Purchase Agreement       1-A/A   024-10496   6.18   November 25, 2015
                         
6.9   Right of First Refusal and Co-Sale Agreement       1-A/A   024-10496   6.19   November 25, 2015

 

 

 

6.10   Promissory Note and Security Agreement, as amended       1-A POS   024-10496   6.10   October 18, 2017
                         
6.11   Loan Purchase Agreement with Harvest Residential Loan Acquisition, LLC       1-A POS   024-10758   6.11   February 7, 2018
                         
6.12   Servicing Agreement with Harvest Residential Loan Acquisition, LLC       1-A POS   024-10758   6.12   February 7, 2018
                         
6.13   Amended and Restated Credit Agreement, dated April 4, 2018 by and among Groundfloor Holdings GA, LLC and ACM Alamosa DA LLC       1-A/A   024-11188   6.13   June 15, 2020
                         
8.1   Escrow Agreement by and among Groundfloor Finance Inc., SI Securities, LLC, and The Bryn Mawr Trust Company of Delaware       1-A/A   024-11188   8.1   June 8, 2020
                         
10.1   Power of attorney       1-A/A   024-11188   10.1   June 15, 2020
                         
11.1   Consent of Cherry Bekaert LLP       1-A   024-11188   11.1   March 30, 2021
                         
11.2   Consent of Robbins Ross Alloy Belinfante Littlefield LLC (included as part of Exhibit 12.1)   X                
                         
12.1   Opinion of Robbins Ross Alloy Belinfante Littlefield LLC   X                

 

 

 

SIGNATURES

 

Pursuant to the requirements of Regulation A, the issuer certifies that it has reasonable grounds to believe that it meets all of the requirements for filing on Form 1-A and has duly caused this offering statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Atlanta, State of Georgia, on April 6, 2021.

 

  GROUNDFLOOR FINANCE INC.
     
  By: /s/ Nick Bhargava
  Name: Nick Bhargava
  Title: Executive Vice President, Secretary and Acting Chief Financial Officer

 

This offering statement has been signed by the following persons in the capacities and on the dates indicated.

 

Signature   Title   Date
         
*   President, Chief Executive Officer and Director (Principal Executive Officer)   April 6, 2021
Brian Dally      
         
/s/ Nick Bhargava   Executive Vice President, Secretary, Acting Chief Financial Officer and Director (Principal Financial and Accounting Officer)   April 6, 2021
Nick Bhargava      
         
*   Director   April 6, 2021
Sergei Kouzmine        
         
*   Director   April 6, 2021
Bruce Boehm        
         
*   Director   April 6, 2021
Michael Olander Jr.        
         
*   Director   April 6, 2021
Richard Tuley Jr.        

 

*By: /s/ Nick Bhargava  
Nick Bhargava  
Attorney-in-fact