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11-K 1 a11-k2021.htm 11-K Document

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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC 20549

___________________

FORM 11-K

___________________

(Mark One)

[ X ] ANNUAL REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the Fiscal Year Ended December 31, 2021

[ ] TRANSITION REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from _______________ to _______________

Commission file number 001-33994

A. Full title of the plan and the address of the plan, if different from that of the issuer named below:

INTERFACE, INC. SAVINGS AND INVESTMENT PLAN

B. Name of issuer of the securities held pursuant to the plan and the address of the principal executive office:

INTERFACE, INC.

1280 WEST PEACHTREE STREET NW

ATLANTA, GA 30309

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Interface, Inc.

Savings and Investment Plan

Financial Statements

Years Ended December 31, 2021 and 2020

Supplemental Schedule

As of December 31, 2021

With Report of Independent Registered Public Accounting Firm

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Interface, Inc.

Savings and Investment Plan


TABLE OF CONTENTS			Page

Report of Independent Registered Public Accounting Firm			4

FINANCIAL STATEMENTS

Statements of Net Assets Available for Benefits – December 31, 2021 and 2020			5

Statements of Changes in Net Assets Available for Benefits – Years Ended December 31, 2021 and 2020			6

Notes to Financial Statements			7

Signatures			13

Exhibit Index			14

SUPPLEMENTAL SCHEDULE

Schedule H, Line 4i, Schedule of Assets (Held at End of Year) – December 31, 202 1			15

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Report of Independent Registered Public Accounting Firm

Plan Administrator and Participants

Interface, Inc. Savings and Investment Plan

Atlanta, Georgia

Opinion on the Financial Statements

We have audited the accompanying statements of net assets available for benefits of the Interface, Inc. Savings and Investment Plan (the “Plan”) as of December 31, 2021 and 2020, the related statements of changes in net assets available for benefits for the years then ended, and the related notes (collectively, the “financial statements”). In our opinion, the financial statements present fairly, in all material respects, the net assets available for benefits of the Plan as of December 31, 2021 and 2020, and the changes in net assets available for benefits for the years then ended, in conformity with accounting principles generally accepted in the United States of America.

Basis for Opinion

These financial statements are the responsibility of the Plan’s management. Our responsibility is to express an opinion on the Plan’s financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (“PCAOB”) and are required to be independent with respect to the Plan in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. The Plan is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Plan’s internal control over financial reporting. Accordingly, we express no such opinion.

Our audits included performing procedures to assess the risk of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by the Plan’s management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.

Supplemental Information

The supplemental information in the accompanying Schedule H, Line 4i – Schedule of Assets (Held at End of Year) as of December 31, 2021, has been subjected to audit procedures performed in conjunction with the audit of the Plan’s financial statements. The supplemental information is presented for the purpose of additional analysis and is not a required part of the financial statements but included supplemental information required by the Department of Labor’s Rules and Regulations for Reporting and Disclosure under the Employee Retirement Income Security Act of 1974. The supplemental information is the responsibility of the Plan’s management. Our audit procedures included determining whether the supplemental information reconciles to the financial statements or the underlying accounting and other records, as applicable, and performing procedures to test the completeness and accuracy of the information presented in the supplemental information. In forming our opinion on the supplemental information, we evaluated whether the supplemental information, including its form and content, is presented in conformity with the Department of Labor’s Rules and Regulations for Reporting and Disclosure under the Employee Retirement Income Security Act of 1974. In our opinion, the supplemental information is fairly stated, in all material respects, in relation to the financial statements as a whole.

We are uncertain as to the year we began serving consecutively as the auditor of the Plan’s financial statements; however, we are aware that we have been the Plan’s auditor consecutively since at least 2003.

/s/ BDO USA, LLP

Atlanta, Georgia

June 24, 2022

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Interface, Inc.

Savings and Investment Plan

Statements of Net Assets Available for Benefits


December 31,	2021		2020
Assets
Investments, at fair value:
Common trusts	$	49,631,962	$	115,996,211
Mutual funds	141,059,229		56,586,644
Interface, Inc. stock	4,008,568		3,567,163
Total investments	194,699,759		176,150,018

Receivables:
Participant contributions	217,648		199,291
Notes receivable from participants	3,428,368		4,419,583
Employer contributions	73,437		—
Total receivables	3,719,453		4,618,874

Net assets available for benefits	$	198,419,212	$	180,768,892

See accompanying notes to financial statements.

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Interface, Inc.

Savings and Investment Plan

Statements of Changes in Net Assets Available for Benefits


Years ended December 31,	2021		2020
Additions to:
Investment income:
Interest and dividend income from mutual funds	$	7,663,728	$	1,617,463
Interest and dividend income from common trusts	341,699		398,052
Dividend income from Interface, Inc. stock	10,607		31,260
Net appreciation in fair market value of investments	18,026,552		18,354,949
Net investment income	26,042,586		20,401,724

Interest income from notes receivable from participants	229,140		248,474

Contributions:
Participant	9,030,067		9,406,564
Employer	3,034,876		1,564,289
Participant rollovers	317,555		463,063
Total contributions	12,382,498		11,433,916

Total additions	38,654,224		32,084,114

Deductions to:
Benefits paid to participants	20,837,419		35,098,869
Administrative expenses	166,485		177,455
Total deductions	21,003,904		35,276,324

Net increase (decrease) in net assets available for benefits	17,650,320		(3,192,210)
Net assets available for benefits, beginning of year	180,768,892		183,961,102
Net assets available for benefits, end of year	$	198,419,212	$	180,768,892

See accompanying notes to financial statements.

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Interface, Inc.

Savings and Investment Plan

Notes to Financial Statements

NOTE 1 – DESCRIPTION OF PLAN

The following description of the Interface, Inc. (the “Company”) Savings and Investment Plan (the “Plan”) provides only general information. Participants should refer to the Plan document for a more complete description of the Plan’s provisions.

General

The Plan is a defined contribution plan established on October 1, 1988 and has since been amended and restated. The Plan covers substantially all full-time employees of Interface, Inc. and adopting domestic subsidiaries who have six months of service and are age eighteen or older. The Plan also covers part-time employees of the Company who have twelve months of service and are age eighteen or older. The Interface, Inc. Administrative Committee is responsible for oversight of the Plan, including the determination of the appropriateness of the Plan’s investment offerings and monitoring of the investment performance.

CARES Act

In March 2020, the World Health Organization declared the COVID-19 outbreak a pandemic. The Coronavirus Aid, Relief and Economic Security Act (“CARES Act”) was enacted March 27, 2020 and as a result the Plan adopted certain provisions of the CARES Act as follows: 1) eligible participants impacted by the COVID-19 pandemic may request a penalty-free special distribution up to $100,000; 2) taxes on this special distribution are due over a three-year period; 3) eligible participants may suspend loan repayments due between March 27, 2020 and December 31, 2020 for up to one year, although interest will accrue during this temporary forbearance.

Contributions

Employer Contributions

The Company contributes fifty percent of the first six percent of eligible compensation that a participant contributes to the Plan. Additional profit-sharing amounts may be contributed at the option of the Company’s Board of Directors in the form of cash or Company common stock. No additional profit-sharing amounts were contributed by the Company to the Plan during the years ended December 31, 2021 and 2020. Contributions are subject to certain limitations.

Effective May 1, 2020 the Plan was amended to temporarily suspend employer matching contributions. Effective January 1, 2021, the Plan was amended to reinstate employer matching contributions.

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Participant Contributions

Each year, participants may contribute up to 40 percent of eligible compensation, as pre-tax or Roth contributions, as defined by the Plan, up to a maximum of $19,500 for both 2021 and 2020. Participants who have attained age 50 before the end of the plan year were eligible to make catch-up contributions of $6,500 for both 2021 and 2020. Participants may also contribute amounts representing distributions from other qualified defined benefit or defined contribution plans (rollover). Participants direct the investment of their contributions into various investment options offered by the Plan.

The Plan includes an auto-enrollment provision whereby all newly eligible employees are automatically enrolled in the Plan unless they affirmatively elect not to participate in the Plan. Automatically enrolled participants have their deferral rate set at three percent of eligible compensation and their contributions are invested in the appropriate target date fund until changed by the participant. Deferral percentages for automatically enrolled participants increase one percent annually up to ten percent.

Participant Accounts

Each participant’s account is credited with the participant’s contributions and Company matching contributions, as well as allocations of the Company’s profit-sharing contribution and Plan earnings. Participant’s accounts are charged with an allocation of administrative expenses that are paid by the Plan. Allocations are based on participant account balances, as defined. The benefit to which a participant is entitled is the benefit that can be provided from the participant’s vested account.

Vesting

Participants are vested immediately in their contributions plus actual earnings thereon. Vesting in the Company’s contribution portion of their accounts is based ratably on years of continuous service. A participant is 100 percent vested after five years of credited service beginning with 20 percent after year one.

Notes Receivable from Participants

Participants may borrow from their accounts a minimum of $1,000 up to a maximum amount equal to the lesser of $50,000 or 50 percent of their vested account balance. Each loan is secured by the balance in the borrowing participant’s account and bears interest at a rate commensurate with local prevailing rates as determined by the Plan Administrator on the date of the loan. Interest rates are currently equal to the prime rate plus one percent. Principal and interest are paid ratably through payroll deductions. Eligible participants may suspend certain loan repayments under provisions adopted in connection with the CARES Act as described above.

Payment of Benefits

On termination of service due to death, disability, retirement, or separation of service, a participant is eligible to receive a lump sum amount equal to the value of the participant’s vested interest in his or her account. Vested balances less than $5,000 may be automatically distributed after termination of employment, in accordance with provisions specified in the Plan. Withdrawals from the Plan may also be made upon circumstances of financial hardship, in accordance with provisions specified in the Plan. Special distributions may be made to eligible participants impacted by the COVID-19 pandemic under provisions adopted in connection with the CARES Act as described above.

Forfeited Accounts

At December 31, 2021 and 2020, the balance of forfeited accounts totaled $19,017 and $119,047, respectively. These accounts will be used to reduce future employer contributions and pay plan administrative expenses. The Plan used $222,832 and $83,482 of the forfeited account balances to reduce employer contributions in 2021 and 2020, respectively. The Plan used $43,910 and $32,693 of the forfeited account balances to pay administrative expenses in 2021 and 2020, respectively.

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NOTE 2 – SUMMARY OF ACCOUNTING POLICIES

Basis of Accounting

The accompanying financial statements of the Plan are prepared under the accrual basis of accounting in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”).

Use of Estimates

The preparation of financial statements in accordance with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and changes therein, and disclosure of contingent assets and liabilities. Actual results could differ from those estimates.

Investment Valuation and Income Recognition

Investments are reported at fair value. Fair value is the price that would be received upon sale of an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. See Note 3 entitled “Fair Value Measurements” for additional information on fair value measurements.

There have been no changes in the valuation methodology used at December 31, 2021 and 2020.

Purchases and sales of securities are recorded on a trade-date basis. Interest income is recorded on the accrual basis. Dividend income is recorded on the ex-dividend date. Net appreciation or depreciation in the fair value of investments includes the Plan’s gains and losses on investments bought and sold as well as held during the Plan year.

Notes Receivable from Participants

Notes receivable from participants are measured at their unpaid principal balance plus any accrued but unpaid interest. Interest income is recorded on the accrual basis. Related fees are recorded as administrative expenses as they are incurred. No allowance for credit losses has been recorded as of December 31, 2021 and 2020. If a participant ceases to make loan repayments and the plan administrator deems the participant loan to be in default, the participant loan balance is reduced and a benefit payment is recorded.

Payment of Benefits

Payments are recorded when paid.

Administrative Expenses

Certain expenses of maintaining the Plan are paid directly by the Company and are excluded from these financial statements. Fees related to the administration of notes receivable from participants, recordkeeping and other Plan expenses are charged directly to the participant’s account and are included in administrative expenses. Investment related expenses are included in net appreciation or depreciation of fair value of investments.

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NOTE 3 – FAIR VALUE MEASUREMENTS

The framework for measuring fair value provides a hierarchy that prioritizes the inputs to valuation techniques used to measure estimated fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1) and the lowest priority to unobservable inputs (Level 3). The three levels of the fair value hierarchy under accounting standards are described below:

Level 1 Inputs to the valuation methodology are unadjusted quoted prices for identical assets or liabilities in the active markets that the Plan has the ability to access.

Level 2 Inputs to the valuation methodology include:

•Quoted prices for similar assets in active markets;

•Quoted prices for identical or similar assets in inactive markets;

•Inputs other than quoted prices that are observable for the asset; and

•Inputs that are derived principally from or corroborated by observable data by correlation or other means.

Level 3 Inputs to the valuation methodology are unobserved and significant to the fair value measurement.

The techniques used to value the Plan’s investments are as follows:

Mutual Funds

Shares of mutual funds held by the Plan are valued at quoted market prices.

Common Trust Funds

The Plan invests in units of common trusts which are valued at net asset value (“NAV”) per unit as a practical expedient to estimate fair value. The NAV, as determined by the Trustee at year end, is computed based on the value of the trust’s underlying assets, less liabilities of the trust, divided by the number of units outstanding. In accordance with applicable accounting standards, investments that are measured at NAV are not categorized within the fair value hierarchy.

The stable value common trust fund is comprised primarily of investments in synthetic investment contracts, which are fully benefit-responsive investment contracts. Participants may initiate unscheduled withdrawals from the trust at contract value; however, certain events may limit the ability to transact at contract value. Such events include, but are not limited to, partial or complete legal termination of the trust, tax disqualification of the trust, and certain trust amendments if consent is not obtained from the issuer. As of December 31, 2021, the occurrence of such an event is not considered probable.

In addition to these limitations, issuers of the synthetic investment contracts have certain rights to terminate a contract and settle at an amount that differs from contract value. Events and circumstances that would allow the issuer to terminate a contract include, but are not limited to, certain breaches by the trust of its obligations, representations or warranties, a prohibited transaction under the Employee Retirement Income Security Act of 1974, as amended (“ERISA”), or other applicable law, if the trust suffers an insolvency, or if there is a change in law or accounting standards that makes it impermissible to account for an investment contract on a contract value basis.

Interface, Inc. Stock

The Company’s common stock is valued based upon the quoted market price for Interface, Inc. common stock.

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The following tables set forth, by level within the fair value hierarchy, the Plan assets at fair value as of December 31, 2021 and 2020, respectively. As required by accounting standards, assets are classified in their entirety based on the lowest level of input that is significant to the fair value measurement. Investments measured at NAV are presented in the tables below to permit reconciliation of the fair value hierarchy to the line items presented in the Statements of Net Assets Available for Benefits.

Assets at Fair Value as of December 31, 2021


Investment Type	Level 1		Total
Mutual funds	$	141,059,229	$	141,059,229
Interface, Inc. stock	4,008,568		4,008,568
Total investments in fair value hierarchy	145,067,797		145,067,797
Common trusts (1)	—		49,631,962
Total investments	$	145,067,797	$	194,699,759

(1) Common trusts are measured at NAV, as a practical expedient, and are not categorized within the fair value hierarchy.

At December 31, 2021, the Plan had no unfunded commitments related to common trust funds. The redemption of common trust funds is subject to the preference of the individual Plan participants and contains no restrictions on the timing of redemption; however, participant redemptions may be subject to certain redemptions fees.

Assets at Fair Value as of December 31, 2020


Investment Type	Level 1		Total
Mutual funds	$	56,586,644	$	56,586,644
Interface, Inc. stock	3,567,163		3,567,163
Total investments in fair value hierarchy	60,153,807		60,153,807
Common trusts (1)	—		115,996,211
Total investments	$	60,153,807	$	176,150,018

(1) Common trusts are measured at NAV, as a practical expedient, and are not categorized within the fair value hierarchy.

NOTE 4 – RELATED PARTY AND PARTY-IN-INTEREST TRANSACTIONS

Plan investments include shares of mutual funds and units of common trusts managed by T. Rowe Price Trust Company. T. Rowe Price Trust Company is the Trustee as defined by the Plan and, therefore, these transactions qualify as party-in-interest. Certain fees incurred by the Plan for investment management services are included in net appreciation (depreciation) in fair value of the investment as they are paid through revenue sharing; rather than a direct payment. The Company as the Plan sponsor pays directly certain other fees related to the Plan’s operations.

At December 31, 2021 and 2020, the Plan held 251,321 and 339,730 shares, respectively, of common stock of Interface, Inc., the sponsoring employer. The Plan also issues loans to participants that are secured by the balances in the respective participants’ accounts. Administrative expenses for the years ended December 31, 2021 and 2020 were $166,485 and $177,455, respectively, and are included in deductions to net assets in the Statements of Changes in Net Assets Available for Benefits.

NOTE 5 – PLAN TERMINATION

Although it has not expressed any intent to do so, the Company has the right under the Plan to terminate the Plan subject to the provisions of ERISA. In the event of Plan termination, participants would become 100 percent vested in their employer contributions. The Company has the right under the Plan to discontinue its contributions at any time.

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NOTE 6 – TAX STATUS

On November 2, 2020, the Company requested that a favorable letter of determination be issued to the Company to confirm that the Plan, as amended and restated, is qualified in its entirety pursuant to the applicable requirements of the Internal Revenue Code (“IRC”).

The Internal Revenue Service (“IRS”) has determined and informed the Company by a letter dated July 22, 2021, that the Plan and related trust are designed in accordance with applicable sections of the IRC. The favorable determination letter was subject to the adoption of an amendment proposed to the IRS, which was timely adopted by the Plan on August 31, 2021. The Plan has been amended since receiving the determination letter. However, the Plan Administrator believes that the Plan is designed and is currently being operated in compliance with the applicable requirements of the IRC and, therefore, believes that the Plan is qualified and the related trust is tax-exempt. Therefore, no provision for income taxes has been included in the Plan’s financial statements.

U.S. GAAP requires Plan management to evaluate tax positions taken by the Plan and recognize a tax liability if the Plan has taken an uncertain tax position that more likely than not would not be sustained upon examination by the IRS. As of December 31, 2021, Plan management concluded that there are no uncertain tax positions requiring recognition of a tax liability or disclosure in the Plan’s financial statements. The Plan is subject to routine audits by taxing jurisdictions; however, there are currently no audits relative to the Plan for any tax periods in progress.

NOTE 7 – RISKS AND UNCERTAINTIES

The Plan invests in various investment securities. Investment securities are exposed to various risks such as interest rate, market and credit risks. Due to the level of risk associated with certain investment securities, it is at least reasonably possible that changes in the values of investment securities will occur in the near term and that such changes could materially affect participants’ account balances and the amounts reported in the Statements of Net Assets Available for Benefits.

NOTE 8 – SUBSEQUENT EVENTS

The Plan has evaluated subsequent events through June 24, 2022, the date the financial statements were available to be issued, and there were no subsequent events requiring adjustments to the financial statements or disclosures.

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the trustees (or other persons who administer the employee benefit plan) have duly caused this annual report to be signed on its behalf by the undersigned hereunto duly authorized.


						ADMINISTRATIVE COMMITTEE OF THE INTERFACE, INC. SAVINGS AND INVESTMENT PLAN


			By:			/s/ Bruce A. Hausmann
						Bruce A. Hausmann, Member

Date: June 24, 2022

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EXHIBIT INDEX


Exhibit No.			Document

23.1			Consent of Independent Registered Public Accounting Firm

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SUPPLEMENTAL SCHEDULE

Interface, Inc.

Savings and Investment Plan

EIN: 58-1451243 Plan #: 002

Form 5500, Schedule H, Line 4i

Schedule of Assets (Held at End of Year)

December 31, 2021

(a)

(b)
Identity of issue, borrower, lessor, or similar party

(d)
Cost**

(e)
Current value

T. Rowe Price Blue Chip Growth Trust

Common Trust

27,820,194

T. Rowe Price Stable Value Common Trust Fund

Common Trust

21,811,768

Total Common Trusts

49,631,962

Federated Hermes Institutional High Yield Bond Fund

Mutual Fund

3,314,991

Invesco International Bond Fund Class A

Mutual Fund

509,755

Vanguard Total Bond Market Index Fund Admiral

Mutual Fund

3,955,775

Allspring Special Mid Cap Value Fund - Class R6

Mutual Fund

3,542,033

American Funds New World Fund Class R-6

Mutual Fund

349,240

T. Rowe Price Balanced Fund

Mutual Fund

9,401,764

ClearBridge International Growth Fund Class I

Mutual Fund

1,739,374

Franklin Small Cap Value Fund Class R6

Mutual Fund

408,558

MassMutual Mid Cap Growth Fund Class I

Mutual Fund

3,512,765

MFS Value Fund Class R6

Mutual Fund

9,248,896

Parnassus Core Equity Fund - Institutional Shares

Mutual Fund

2,775,694

State Street Target Retirement 2020 Fund - Class K

Mutual Fund

5,085,676

State Street Target Retirement 2025 Fund - Class K

Mutual Fund

11,891,161

State Street Target Retirement 2030 Fund - Class K

Mutual Fund

12,789,613

State Street Target Retirement 2035 Fund - Class K

Mutual Fund

12,325,627

State Street Target Retirement 2040 Fund - Class K

Mutual Fund

11,908,199

State Street Target Retirement 2045 Fund - Class K

Mutual Fund

10,500,727

State Street Target Retirement 2050 Fund - Class K

Mutual Fund

6,826,108

State Street Target Retirement 2055 Fund - Class K

Mutual Fund

3,448,733

State Street Target Retirement 2060 Fund - Class K

Mutual Fund

1,700,484

State Street Target Retirement 2065 Fund - Class K

Mutual Fund

74,903

State Street Target Retirement Fund - Class K

Mutual Fund

2,314,569

T. Rowe Price QM U.S. Small-Cap Growth Equity Fund

Mutual Fund

2,421,765

Transamerica International Equity R6

Mutual Fund

1,740,241

U.S. Treasury Money Fund

Mutual Fund

1,749,154

Vanguard Developed Markets Index Fund Admiral

Mutual Fund

540,968

Vanguard Mid-Cap Index Fund Admiral

Mutual Fund

2,030,878

Vanguard Small-Cap Index Fund Admiral

Mutual Fund

1,801,527

Vanguard 500 Index Fund Admiral

Mutual Fund

13,150,051

Total Mutual Funds

141,059,229

Interface, Inc. Stock - Employer Securities

Common Stock

4,008,568

Total Investments per Financial Statements

194,699,759

Participant Loans

Interest rates ranging from 4.25% - 6.50%; maturing through November 2029

-0-

3,428,368

Total Investments per Form 5500

198,128,127

*Party-in-interest

**The cost of participant-directed investments is not required to be disclosed