# EDGAR Filing Document

**Accession Number:** 0001768621
**File Stem:** 0001746059-23-000018
**Filing Date:** 2023-1
**Character Count:** 217124
**Document Hash:** faa491ca95a5c25722d17f2c39100a3a
**Contains OCR:** False
**Source Format:** 

## Filing Content

## Filing Summary
**0001746059-23-000018.hdr.sgml**: 20230119

**ACCESSION NUMBER**: 0001746059-23-000018

**CONFORMED SUBMISSION TYPE**: C

**PUBLIC DOCUMENT COUNT**: 8

**FILED AS OF DATE**: 20230119

**DATE AS OF CHANGE**: 20230119

**FILER**: 

**COMPANY DATA:**
- **COMPANY CONFORMED NAME:** Commongrounds Cooperative
- **CENTRAL INDEX KEY:** 0001768621
- **IRS NUMBER:** 825311373
- **STATE OF INCORPORATION:** MI
- **FISCAL YEAR END:** 1231

**FILING VALUES:**
- **FORM TYPE:** C
- **SEC ACT:** 1933 Act
- **SEC FILE NUMBER:** 020-31633
- **FILM NUMBER:** 23536042

**BUSINESS ADDRESS:**
- **STREET 1:** 425 BOARDMAN AVE
- **STREET 2:** SUITE C
- **CITY:** TRAVERSE CITY
- **STATE:** MI
- **ZIP:** 49684
- **BUSINESS PHONE:** 5175250810

**MAIL ADDRESS:**
- **STREET 1:** 425 BOARDMAN AVE
- **STREET 2:** SUITE C
- **CITY:** TRAVERSE CITY
- **STATE:** MI
- **ZIP:** 49684

### Attached PDF Documents

**Attachment 1:** `commgrounds2_offmo.pdf`

![img-0.jpeg](img-0.jpeg)

## OFFERING MEMORANDUM

facilitated by

![img-1.jpeg](img-1.jpeg)

# Commongrounds Cooperative

## FORM C

### OFFERING

### MEMORANDUM

#### Purpose of This Form

A company that wants to raise money using Regulation Crowdfunding must give certain information to prospective investors, so investors will have a basis for making an informed decision. The Securities and Exchange Commission, or SEC, has issued regulations at 17 CFR §227.201 listing the information companies must provide. This form - Form C - is the form used to provide that information.

Each heading below corresponds to a section of the SEC’s regulations under 17 CFR §227.201.

#### (A) The Company

| Name of Company | Commongrounds Cooperative |
| --- | --- |
| State of Organization | MI |
| Date of Formation | 03/22/2018 |
| Entity Type | Corporation |
| Street Address | 425 Boardman Ave Ste C, Traverse City MI, 49684 |
| Website Address | https://www.commongrounds.coop/ |

#### (B) Directors and Officers of the Company

| Key Person | Christopher J Treter |
| --- | --- |
| Position with the Company | Title First Year |
|  | Secretary 2018 |

| Other business experience (last three years) | Higher Grounds Trading Company - Co-Founder/Director Sep 2001 - Present; Traverse City, MI Oversee operations and Producer relations at Higher Grounds Trading Co. - http://www.highergroundstrading.com - a 100% fair trade and organic specialty coffee roasting company. |
| --- | --- |

| Key Person | Andrew P Cole |
| --- | --- |
| Position with the Company | Title Board Director First Year 2021 |
| Other business experience (last three years) | Principal Consultant , February 2020 to Present - Mainspring Consulting LLC. Responsibilities include management consulting and coaching. Executive Director , January 2018 to December 2019. 20Fathoms. |

| Key Person | Valarie S Handy |
| --- | --- |
| Position with the Company | Title President First Year 2019 |
| Other business experience (last three years) | USDA Rural Development - Innovation Center Social/Data Scientist o Translate program performance research results for USDA leadership, internal staff members, community partners and external customers o Design and Administer access provisioning process related to agency data and data visualization tools including the development and facilitation of three internal communities of practitioners (#datapeople) o Set key performance indicators to strategically invest in distressed communities for increased impact with limited funding o Support the development of a Departmental data governance structure o Design and develop data visualizations that improve leadership's ability to make decisions |

| Key Person | Nicholas D Viox |
| --- | --- |
| Position with the Company | Title Board Director First Year 2019 |
| Other business experience (last three years) | President & Programming/ Events Co-Chair 2018 - Present. |

| Key Person | Attia Qureshi |
| --- | --- |
| Position with the Company | Title Board Director First Year 2019 |
| Other business experience (last three years) | Fouder & Principal - Culture & Leadership Consultant - 2017 - Present |

| Key Person | Matthew F. Hollander |
| --- | --- |
| Position with the Company | Title Treasurer First Year 2020 |
| Other business experience (last three years) | Hollander Development Corporation - President/Principal Mar 2018 - Present (President), Sept 2013 -- Present (Principal); Portage, Michigan Developer of affordable multifamily housing. Developer of commercial, mixed-use, and other real estate projects. Expert in LEED and other green building programs. Expert in lifecycle analysis, energy conservation measures, and sustainability. Oversee day to day operations of Hollander Development Corporation's Michigan real estate portfolio. Consult clients on tax credits, grant programs, and other financial tools. |

| Key Person | Michael D Mittelstaedt |
| --- | --- |
| Position with the Company | Title Board Director First Year 2019 |

| Other business experience (last three years) | Director , Film and New Media Interlochen Center for the Arts 2005 - Present |
| --- | --- |

| Key Person | Leslie Donaldson |
| --- | --- |
| Position with the Company Title First Year | Chief Executive Officer 2022 |
| Other business experience (last three years) | ○ Assistant Teaching Professor, Carnegie Mellon University. Aug 2018 - Jun 2022. Served as a full- time faculty member in the Master of Arts Management (MAM) Program. ○ Director of Engagement, Interlochen Center for the Arts. Aug 2015-Aug 2018. Served in a newly-created leadership role and division to design and oversee ○ institutional engagement initiatives on campus, off campus, and virtually. (Previous Role: Director of College of Creative Arts, Sept 2013- August 2015) ○ Executive Director, Arts Council of Greater Lansing. Nov 2005-Sept 2013. Cultivated strategic local, regional, and statewide municipal and business partnerships to meet cultural needs, raise funds, and deliver direct programs and services to 140 arts and cultural agencies and 200 artists in three counties. |

| Key Person | Katherine Redman |
| --- | --- |

| Position with the Company | Title First Year | Program Director 2018 |
| --- | --- | --- |
| Other business experience (last three years) | Project Director/Co-Founder Commongrounds Cooperative 2018 - present Attorney Commonplace law - 2017 to Present |  |

| Key Person | Rob Bacigalupi |  |
| --- | --- | --- |
| Position with the Company | Title First Year | Director 2022 |
| Other business experience (last three years) | Principal Consultant, Mission North, LLC. Jan 2010 - Present. Assist communities with housing initiatives and incentives and facilitate development and strategic planning for economic development organizations. Executive Director, Traverse City Downtown Development Authority. 19 years, 3 months. Served in a variety of roles including Executive Director overseeing agency in charge of promoting economic development and managing parking in one of the Midwest's most dynamic small towns. |  |

# (C) Each Person Who Owns 20% or More of the Voting Power

| Name of Holder | % of Voting Power (Prior to Offering) |
| --- | --- |
| Katherine Redman | 20% |

# (D) The Company's Business and Business Plan

## Our Mission

Commongrounds is a real estate cooperative in Traverse City, with a goal to develop real estate that meets community needs and increases quality of life in the region.

- Commongrounds has two classes of ownership: our commercial real estate tenant-owners (businesses and nonprofits), and members of our community. All investors must purchase a $50 lifetime (non-refundable) share to become a community owner in Commongrounds. This allows you to be an owner of the cooperative and have the opportunity to invest in the project and receive regular updates. You may also choose to pay an annual membership fee to be an active member who can participate in governance and membership benefits. To purchase a $50 ownership share, please go to www.commongrounds.coop/join.
- More than a building project, Commongrounds will be a backbone support for space and activities integrating wellness, arts, family, and food to help people and organizations be healthy, connected, creative, and inclusive.

Together, we will provide shared value and triple bottom line returns on investment to tenants, partner organizations, and people working, living, learning, and playing in the region.

## The Team

Leslie Donaldson, Chief Executive Officer

Leslie joined Commongrounds in June 2022 with decades of experience leading complex initiatives in community engagement, educational programming, and creative placemaking. Prior to Commongrounds, Leslie served as an Assistant Teaching Professor at Carnegie Mellon University, held two different senior leadership roles at Interlochen Center for the Arts, and designed and lead a range of festivals, programs, and community endeavors in Lansing, Michigan, including a collaboration with governmental partners and Michigan State University on a regional cultural economic development initiative. Leslie holds her Master of Fine Arts from Rhode Island School of Design and a Bachelor of Fine Arts from Michigan State University. She is a proud graduate of Traverse City Central High School and has been a lifelong advocate for Northern Michigan.

Kate Redman, Project Director

Kate Redman is a community enterprise attorney and the co-founder and project director of Commongrounds, a real estate cooperative in Traverse City, Michigan. Commongrounds develops real estate that is owned by its tenants and community and is designed to meet community needs and increase the quality of life in northern Michigan. Kate also founded Commonplace, a nonprofit coworking and community hub in Traverse City.

Andrew Lutes, Chief Operations Officer

Andrew's background spans from hospitality management and purpose-driven business operations, to music performance and early childhood tutoring. Most recently, he came to the project in October of 2020 after working as the General Manager of Workshop Brewing since 2016.

Joy Martin Omar, Director of Stakeholder Engagement and Events

A 'professional people person' with over a decade of sales and marketing experience, Joy takes pride in connecting communities through mission-driven business and local food systems. Raised in Ann Arbor, Michigan she established a career in artisan retail at Zingerman's Delicatessen, and joins Commongrounds after three years as Marketing Manager and Assistant General Manager at Common Good Bakery in Traverse City, Michigan. Joy also runs Saltless Sea Creamery alongside husband/cheesemaker, Dave, and can often be found trying to keep up with her two young sons (Sam, 2 and Milo, 9 months) while wondering where she left her last cup of coffee.

Joey DiFranco, Creative Director

With over 15+ years as a creative and media strategist, Joey has driven growth and creative innovation for a variety of global brands including Nike, Google, Allstate, Fuji and more. An entrepreneur and media futurist, Joey seeks out unique strategies and opportunities for both investment and development, often on a non-traditional path.

Jessica Kooiman Parker, Visual Arts Curator and Designer

Jessica is an independent curator, art advisor, and designer developing the contemporary visual

art program at Commongrounds. In her previous work, Jessica served as the Executive Director and Curator of the Firehouse Art Center in Longmont, CO, where she increased the budget and attendance while fulfilling the mission of providing life enhancing experiences through art. After becoming a mother, Jessica transitioned to independent curation, working with Redline Contemporary Art Center in Denver and Artworks Loveland before becoming the Visual Arts Curator of the Dairy Arts Center in Boulder, CO. Jessica holds her Bachelor of Fine Arts from the University of Wisconsin-Stout.

#### Ray Kendra, Architect

Ray Kendra is the architect of Commongrounds and founder/principal at Environment Architects, an architectural firm focused designing buildings that contribute to the environments that surround us. The firm looks at the circumstances, objects and conditions that are all around and create spaces that are functional, well-thought and beautiful. His experience includes residential and multi-use buildings similar in scope and size as Commongrounds.

#### Cunningham-Limp Construction, Construction Management

Cunningham-Limp is the construction management firm construction the building. They are a diversified real estate firm that specializes in development, design, and construction. They lead with a team of real estate experts, financial advisors, architects, engineers, and construction professionals. We deliver solutions by integrating with an ownership team and actively managing projects from concept through completion, assuming 100% responsibility for all phases of each project.

#### Sam Bennett, Project Manager

After receiving his Business Management and Marketing Degree from Loyola Marymount University, Sam started his career developing and executing grassroots marketing strategies for Red Bull Energy Drink, and then went on to lead global lifestyle marketing and entertainment projects for GoPro Inc. Today, Sam is a consultant with SwellMinded, an impact consultancy where he works as a strategist, project manager, and content producer focused on helping purpose-driven organizations better communicate the good that they are doing for their communities and our environment. Sam works closely with Commongrounds Cooperative through his role at SwellMinded.

#### Elise Crafts, Communications Manager

Elise is a consultant via her firm Statecraft, a community development consultancy founded in 2018 to help communities and organizations make their visions a reality. Elise combines her experience with community engagement, planning, development, and implementation to facilitate processes that are community-informed, action-oriented, partnership-driven, and tailored. In addition to her expertise in community development, Elise also offers communications services, including content development and project management to help project leaders fulfill their visions.

#### The Building

Our pilot project is 414 E. Eighth Street, a 4-story mixed-use building opening to the public in early 2023.

- Located on the Boardman/Ottoway River and in the heart of the North Boardman Lake District in downtown Traverse City, Michigan -- the building offers stunning views of the

river and easy access to nearby trails and multi-modal transportation.

- The building is designed to meet community needs, offering workforce housing co-located with expanded locations for local nonprofit and business organizations focused on food, family, arts, and wellness.
- Its development adds timely momentum to the redevelopment of 8th Street as a vibrant bike-and pedestrian-friendly neighborhood corridor.
- The green design uses low impact design principles and features a green roof, energy and water efficient construction, low-emitting materials, and stormwater managed onsite.

# Inside the Space

Inside 414 E. Eighth Street you will find integrated community spaces, featuring tenant partners focused on food, family arts, and wellness--and workforce housing rental units.

- The first floor is home to an early childhood education center along with a restaurant and cafe that mentors food entrepreneurs, lowering barriers to success and integrating them with the local food network.
- The second floor contains a 150-seat performing arts and event venue, a teaching kitchen, and coworking and meeting space for nonprofits and small businesses.
- The third and fourth floors provide workforce housing, which are a mix of studio and 1- and 2-bedroom apartments. Rents vary based on income and are set to be affordable for people earning 60% of area median income up to market rate units.

# Use of Funds: Making this House a Home!

In Phase I and Phase II of our financing, we raised the money we needed to build a building--but your investment in Phase III will help us launch the project and open its doors, making the building even better and ensuring long-term sustainability for this place our community can all call home.

- Final hard construction costs, such as: solar infrastructure, teaching kitchen completion, and a marquee; community amenities focused on food, families, arts, and wellness; and other build-out items to improve common areas and support our tenant-owners
- Operating capital, such as: additional staffing for next 16 months, design, food/arts/family incubation, licensing, technology, communications, financing costs, reserve
- Replacement of other financing with community investment

For more information, please refer to the Page View included with this filing.

# (E) Number of Employees

The Company currently has 2 employees. The Company may hire or discharge employees in the future to meet its objectives.

# (F) Risks of Investing

A crowdfunding investment involves risk. YOU SHOULD NOT INVEST ANY FUNDS IN THIS OFFERING UNLESS YOU CAN AFFORD TO LOSE YOUR ENTIRE INVESTMENT. In making an investment decision, investors must rely on their own examination of the issuer and the terms of the offering, including the merits and risks involved. Please review the Educational Materials for risks that are common to many of the companies on the MainVest platform.

THESE SECURITIES ARE OFFERED UNDER AN EXEMPTION FROM REGISTRATION UNDER

FEDERAL LAW. THE U.S. SECURITIES AND EXCHANGE COMMISSION (THE “SEC”) HAS NOT MADE AN INDEPENDENT DETERMINATION THAT THESE SECURITIES ARE EXEMPT FROM REGISTRATION. THE SEC HAS NOT PASSED UPON THE MERITS OF THE SECURITIES OR THE TERMS OF THE OFFERING, AND HAS NOT PASSED UPON THE ACCURACY OR COMPLETENESS OF THE OFFERING DOCUMENTS OR LITERATURE.

THESE SECURITIES HAVE NOT BEEN RECOMMENDED OR APPROVED BY ANY FEDERAL OR STATE SECURITIES COMMISSION OR REGULATORY AUTHORITY. FURTHERMORE, THESE AUTHORITIES HAVE NOT PASSED UPON THE ACCURACY OR ADEQUACY OF THIS DOCUMENT.

Please refer to Appendix B for additional risks to consider when investing in this offering.

# **(G) Target Offering Amount and Offering Deadline**

| Target Offering Amount | $100,000 |
| --- | --- |
| Offering Deadline | May 1st, 2023 |

If the sum of the investment commitments does not equal or exceed the Target Offering Amount as of the Offering Deadline, no securities will be sold in the offering, investment commitments will be canceled, and all committed funds will be returned. The Company may extend the Offering Deadline and shall treat such an extension as a material change to the original offer and provide Investors with notice and opportunity to reconfirm their investment in accordance with Section

(K) of this Memorandum.

# **(H) Commitments that Exceed the Target Offering Amount**

| Will the Company accept commitments that exceed the Target Offering Amount? | Yes |
| --- | --- |
| What is the maximum you will accept in this Offering? | $1,000,000 |
| If Yes, how will the Company deal with the oversubscriptions? | We will accept subscriptions on a first-come, first-served basis. |

# **(I) How the Company Intends to Use the Money Raised in the Offering**

The Company is reasonably sure it will use the money raised in the offering as follows:

| Use | Amount (Minimum) | Amount (Maximum) |
| --- | --- | --- |
| Repayment of bridge loans for construction | $33,000 | $400,000 |
| Add'l build out costs and community amenities | $27,250 | $400,000 |
| Operating capital (additional staffing for next 16 months, design, food/arts/family incubation, licensing, technology, communications, financing costs, reserve | $33,000 | $132,500 |
| Mainvest Compensation | $6,750 | $67,500 |
| TOTAL | $100,000 | $1,000,000 |

The amounts listed estimates and are not intended to be exact description of the Company's expenditures. Exact allocation and use of funds may vary based upon legitimate business expenditures and economic factors.

#### (J) The Investment Process

##### To Invest

- Review this Form C and the Campaign Page
- If you decide to invest, enter an amount and press the Invest button Follow the instructions

#### TO CANCEL YOUR INVESTMENT

Send an email to info@mainvest.com no later than 48 hours before the Offering Deadline or go to the dashboard for your user account to cancel manually. In your email, include your name and the name of the Company.

##### Other Information on the Investment Process

- Investors may cancel an investment commitment until 48 hours prior to the Offering Deadline.
- MainVest will notify investors when and if the Target Offering Amount has been raised.
- If the Company reaches the Target Offering Amount before the Offering Deadline, it may close the offering early if it provides notice about the new Offering Deadline at least five business days before such new Offering Deadline, absent a material change that would require an extension of the offering and reconfirmation of the investment commitment.
- If an investor does not cancel an investment commitment before the 48-hour period before the Offering Deadline, the funds will be released to the Company upon closing of the offering and the investor will receive securities in exchange for his or her investment.

For additional information about the investment and cancellation process, see the Educational Materials.

#### (K) Material Changes

In the event the issuer undergoes a material change, the Investor will be notified of such change. The investor will have five (5) business days from the receipt of such notice to reconfirm their investment. IF AN INVESTOR DOES NOT RECONFIRM HIS OR HER INVESTMENT COMMITMENT WITHIN FIVE (5) DAYS OF THE NOTICE OF MATERIAL CHANGE BEING SENT, THE INVESTOR'S INVESTMENT COMMITMENT WILL BE CANCELLED, THE COMMITTED FUNDS WILL BE RETURNED, AND THE INVESTOR WILL NOT BE ISSUED ANY OF THE SECURITIES REFERENCED IN THIS OFFERING.

#### Explanation

A 'material change' means a change that an average, careful investor would want to know about before making an investment decision. If a material change occurs after you make an investment commitment but before the Offering closes, then the Company will notify you and ask whether you want to invest anyway. If you do not affirmatively choose to invest, then your commitment will be cancelled, your funds will be returned to you, and you will not receive any securities.

#### (L) Price of the Securities

The Company is offering 'securities' in the form of equity investment certificates, which we refer to as 'Investment Certificates.' The Investment Certificates are being offered at a value of $1 per Investment Certificate.

# (M) Terms of the Securities

# Overview

The Company is offering “securities” in the form of equity investment certificates, which we refer to as “Investment Certificates.” The Terms of the Investment Certificates are set forth in the C-2 Investment Certificate Agreement attached as Appendix A. Copies of the Investment Certificate are attached to this Form C.

# Summary of Terms

All investors must join as an owner of the Cooperative (www.commongrounds.coop/join). The Investment Certificates provide owner-investors with an opportunity to earn an equity-like dividend return, beginning the year after building completion, which will be disbursed annually from there forward until the investor withdraws and is repaid their original investment amount. The rate of return issued to each investor will be dependent on whether they select the regular return rate or our social impact return option. The regular rate will be 6% annually on the amount invested, while the social impact rate will be 3% annually, with an additional 3% being directed by the cooperative board to areas of social impact in the community and the building. The investor will annually have the option to choose to withdraw their capital after Year 5, contingent upon the Cooperative obtaining replacement capital. Investors will also receive perks as outlined below. Details are available in the investor agreement.

# Obligation to Contribute Capital

Once you pay for your Investment Certificate, you will have no obligation to contribute more money to the Company, and you will not be personally obligated for any debts of the Company. However, under some circumstances you could be required by law to return some or all of a distribution you receive from the Company..

# No Right to Transfer

You should plan to hold the Notes until maturity. The Notes will be illiquid (meaning you might not be able to sell them) for at least four reasons:

- The Revenue Sharing Agreement prohibits the sale or other transfer of Notes without the Company’s consent.
- If you want to sell your Note the Company will have the first right of refusal to buy it, which could make it harder to find a buyer.
- Even if a sale were permitted, there is no ready market for Notes, as there would be for a publicly-traded stock.
- By law, for a period of one year you won’t be allowed to transfer the Investor Shares except (i) to the Company itself, (ii) to an “accredited” investor, (iii) to a family or trust, or (iii) in a public offering of the Company’s shares

# Modification of Terms of Notes

The terms of the Investment Certificates may be modified or amended with the consent of Investors holding 50% of the Investment Certificates, measured by the total amount outstanding under each Investment Certificate.

#### Other Classes of Securities

| Name of Security | C-1 Investment Certificates |
| --- | --- |
| Number of Shares Outstanding | 1223667 |
| Describe Voting Rights of These Securities, Including Any Limitations on Voting Rights | Non-voting |
| How these securities differ from the Investment Certificates being offered to investors | The securities being offered in this round of funding are similar non-voting equity securities, with the same dividend yield as 2021. Please see offering disclosures for more details. |

| Name of Security | C-1T Investment Certificates |
| --- | --- |
| Number of Shares Outstanding | 957086 |
| Describe Voting Rights of These Securities, Including Any Limitations on Voting Rights | Non-voting |
| How these securities differ from the Investment Certificates being offered to investors | These are non-voting investment certificates issued on behalf of investors to provide down payments on behalf of investors, with potential to earn preferred returns paid by the tenant- owners and Commongrounds (issued in 2020 and 2021) |

| Name of Security | Class C Community Owner Shares |
| --- | --- |
| Number of Shares Outstanding | 852 |
| Describe Voting Rights of These Securities, Including Any Limitations on Voting Rights | Voting |
| How these securities differ from the Investment Certificates being offered to investors | Class C shares are purchased by community members for $50 each and have rights described in Cooperative governing documents and share agreements. |

| Name of Security | Class T-1 Tenant-Owner Shares |
| --- | --- |
| Number of Shares Outstanding | 6 |
| Describe Voting Rights of These Securities, Including Any Limitations on Voting Rights | Voting |
| How these securities differ from the Investment Certificates being offered to investors | Class T-1 shares are purchased by commercial tenant-owners and are accompanied by a long-term lease agreement for a specific unit in the building. The price of these shares is tied to the square footage of the unit (approximately $285/sq ft plus other construction, financing, and ongoing costs). |

## Dilution of Rights

The Company has the right to create additional classes of securities, both equity securities and debt securities. Some of these additional classes of securities could have rights that are superior to those of the Investment Certificates.

## The People Who Control the Company

Each of these people owns 20% or more of the total voting power of the Company:

| Name of Holder | % of Voting Power (Prior to Offering) |
| --- | --- |
| Katherine Redman | 20% |

## How the Exercise of Voting Rights Could Affect You

The directors and/or people with voting rights control the Company and make all the decisions about running its business. If they make good business decisions, it is more likely that your shares will increase in value If they make poor business decisions, it is less likely that your shares will increase in value For example, if they hire too many people and/or try to expand too quickly, the business could be harmed.

## How the Certificates are Being Valued

The Company is offering “securities” in the form of equity investment certificates, which we refer to as “Investment Certificates.” The Investment Certificates are being offered at a value of $1 per Investment Certificate.

## (N) The Funding Portal

The Company is offering its securities through MainVest, Inc., which is a “Funding Portal” licensed by the Securities and Exchange Commission and FINRA. MainVest Inc.’s Central Index Key (CIK) number is 0001746059, their SEC File number is 007-00162, and their Central Registration Depository (CRD) number is 298384.

## (O) Compensation of the Funding Portal

MainVest will be paid 5.0% of the final offering amount, upon the successful completion of the offering. MainVest does not receive compensation if the offering does not succeed. MainVest, Inc. owns no interest in the Company, directly or indirectly, and will not acquire an interest as part of the Offering, nor is there any arrangement for MainVest to acquire an interest.

# (P) Indebtedness of the Company

| Creditor | Amount | Interest Rate | Maturity Date | Other Important Terms |
| --- | --- | --- | --- | --- |
| Coastal States Bank | $8,000,000 | 5.5% | 02/26/2051 | First Mortgage, U.S. Dept of Ag Business & Industry Loan Guarantee |
| IFF | $1,500,000 | 6.625% | 09/01/2037 | Second Mortgage |
| HASI OBS OP A LLC | $1,850,000 | 5.8% | 12/02/2046 | PACE Special Assessment Financing |
| Anonymous | $375,000 | 6% | 01/31/2023 | Community Owner Bridge Loans |

# (Q) Other Offerings of Securities within the Last Three Years

The company has had three prior securities offerings consisting of the following:

On February 21, 2019, the Company began an offering under the Regulation Crowdfunding [Section 4(a)(6)] exemption. The securities being sold were C-1 Investment Certificates, which are Non-voting equity certificates of the company. Through this exemption, a total of $272,450 of C-1 Investment Certificates were sold. The proceeds were used for land acquisition and location buildout.

On June 13, 2019, the Company began an offering under the Regulation D Rule 504(b) exemption. The securities being sold were C-1 Investment Certificates, which are Non-voting equity certificates of the company. Through this exemption, a total of $546,000 of C-1 Investment Certificates were sold. The proceeds were used for land acquisition and location buildout.

October 2021 Rule 17CFR 227 (Regulation Crowdfunding) Investment Certificates totaling $430,900. Please refer to the company's Form C/U dated August 11th, 2022 for additional disclosures.

# **(R) Transactions Between the Company and 'Insiders'**

Related Entities The Company is subject to various conflicts of interest arising out of its relationship with an affiliated entity, Commongrounds, LLC (the 'Affiliate'), a real estate LLC owned by the Company and investors. Some community owners of the Company are also owners in the Affiliate. The Company and the Affiliate are co-owners of the Property. In addition, commercial tenants and community owners of the buildings are also shareholders in the Company and elect and/or serve as directors. Any related person or entity that is or has a representative on the Board will recuse themselves from votes on matters that disproportionately affect their financial interest relative to other directors and will fully disclose any such interest (pursuant to Company policy). Conflicts that involve all directors will be resolved through the exercise of the Cooperative Board's judgment and the Company's investment objectives and policies.

Related Party Participation in the Offering Any securities subscribed for by officers, directors, or affiliates of the Company (or their affiliates or related persons thereof) will not be counted in determining whether the Minimum Offering Amount has been raised in the Offering.

Financial Obligations Relating to Entities Under Common Control The Company has entered into a land lease with the Affiliate for a 99-year lease for the property under construction at 414 E 8th Street. The Affiliate previously raised $550,000 in equity (the 'Affiliate Capital') to purchase the land for the Project, which is co-owned by the Affiliate and the Company. In return for the Affiliate Capital, the Affiliate is entitled to a 250% buyout on 75% of the capital contributed in Year 10. On the other 25% of the capital contributed, the Affiliate is entitled to annual interest payments of 7.5% and a 150% buyout in Year 10. There are no voting rights afforded to the Affiliate in association with the Affiliate capital, however the return provisions outlined herein will be senior in preference to the C-1 Investment Certificates contemplated in this Offering. If there were to be insufficient capital available to pay both the obligations to the Affiliate and the obligations to the Investors in this Offering, the Investors in this Offering may not receive a return on investment or a return of their initial capital contribution

### (S) The Company's Financial Condition

Commongrounds Cooperative (the "Company") is organized as a Michigan non-profit corporation which operates for the purposes of community and real estate development and transforming real estate development by providing inclusive opportunity for community and tenant members to own and engage with all stages of a development, including planning, financing, ownership, and management; to design facilities for their benefit, use, and occupancy; and purposes and activities incidental and related to the foregoing purposes.

Please see our 2021 audit for detailed information on our financials as of December 31, 2021. We are still finalizing review of our 2022 financial statements (as of January 17, 2023), but here is a good faith summary as of December 31, 2022.

As of December 31, 2020 the Company had assets of $11,982,136.58, which was comprised primarily of property, including construction in progress ($10,429,248), capitalized soft costs ($485,631); as well as a deferred tax asset of $85,913, and other assets of cash, investment, and interests reserves held by our lenders (together totaling $930,926 with $40,416 in cash and $310,356 in cash interest reserves).

Commongrounds Cooperative is the majority (60%) owner of Commongrounds, LLC, which has leased the land at 414 E. 8th Street to Commongrounds Cooperative for 99 years for construction of a building. Commongrounds LLC is co-owned by investors (none of whom own more than 10%), who collectively invested $550,000 into the land purchase. Commongrounds Cooperative is planning to purchase the LLC co-ownership interests no later than 2028.

The company has had no major cash events since the 2022 financial sheets other than regular monthly operational expenses. The company did experience the following major cash event in 2021-22:

- Received a $1.5mm grant from the Michigan Strategic Fund in February 2021 for the construction of a new commercial and residential development.
- Entered into an agreement with a bank on February 26, 2021, for a construction loan not to exceed $8mm. This loan is collateralized by all assets of the cooperative. Almost $8mm has been drawn as of December 31, 2022 in order to complete construction on the building.
- Entered into an agreement on February 26, 2021 with HASI OBS OP A LLC for a loan in the amount of $1,850,000. This loan is collateralized by real estate and is a PACE Special Assessment that stays with the property rather than the cooperative.
- Entered into an agreement on February 26, 2021 with IFF, which is a non-profit Community Development Financial Institution (CDFI), for a loan of up to $1,500,000. This loan is collateralized by real estate. About $1m has been drawn as of December 31, 2022 in order to

complete construction on the building.

- Received approximately $660,000 for the issuance of Class T-1 certificates for community owner investors supporting specific commercial tenant-owners. These investors will earn a preferred dividend for their investment and be repaid by the tenant-owners.

- Received approximately $430,000 in a Mainvest investment crowdfunding campaign as Community Owner investment certificates.

- Received bridge loans totally $375,000 from community owners while we pursue and increase in loan funds from IFF (anticipated by March 2023).

- Received a temporary certificate of occupancy for the entire building excepting commercial tenants who are not yet operational but are planning to be by spring 2023.

As of December 31, 2022, the Company just started generating revenue through rental of residential units and it rented at 85% of capacity. The commercial portions of the building are fully leased to our commercial tenant-owners but are not yet fully operational and open to the public. Commongrounds expects to start earning revenue from commercial tenants and from community membership events and rentals in Q1 of 2023. Accordingly, there are limited financial statements and information for investors to review. When evaluating this investment opportunity, investors should consider factors outlined in the risk section as well.

In terms of expenses, in 2022 the Company had total expenses of approximately $1,236,365, which included: construction loan interest payments ($310,356), taxes ($102,854), and various operations, staff, and contractor fees related to construction and operations.

#### Financial liquidity

Commongrounds Cooperative has a low liquidity position due to its low cash reserves as compared to debt and other liabilities. Commongrounds Cooperative expects its liquidity position to grow as it generates revenue this year and also decline upon raising capital on Mainvest and deploying the capital to grow the business.

#### (T) The Company’s Financial Statements

Please see Appendix C for historical financial statements.

##### Pro Forma Income Statement

In order to illustrate its future earning potential, the Company has provided a summary of its - year financial forecast. The forecast has been developed by the Company using reasonable best efforts based on their understanding of the industry and market they wish to enter. Please refer to Section (F) of this Offering Memorandum for a list of the risks associated with an investment in the Company and utilizing any pro forma provided by the Company for making investment decisions.

|  | Year 1 | Year 2 | Year 3 | Year 4 | Year 5 |
| --- | --- | --- | --- | --- | --- |
| Gross Sales | $819,356 | $1,597,962 | $1,627,140 | $1,657,073 | $1,687,783 |
| Cost of Goods Sold |  |  |  |  |  |
| Gross Profit | $819,356 | $1,597,962 | $1,627,140 | $1,657,073 | $1,687,783 |
| EXPENSES |  |  |  |  |  |
| Utilities | $8,749 | $13,123 | $9,191 | $9,420 | $9,655 |
| Salaries | $266,667 | $275,000 | $283,250 | $291,748 | $300,500 |
| Insurance | $8,399 | $8,608 | $8,823 | $9,043 | $9,269 |
| Repairs & Maintenance | $11,667 | $11,958 | $12,256 | $12,562 | $12,876 |
| Legal & Professional Fees | $9,000 | $9,225 | $9,455 | $9,691 | $9,933 |
| Marketing & Member Services | $14,175 | $18,900 | $14,892 | $15,264 | $15,645 |
| Property Taxes | $127,000 | $160,929 | $133,429 | $136,764 | $140,183 |
| General/Admin | $22,792 | $18,500 | $23,945 | $24,543 | $25,156 |
| Security Expenses | $4,667 | $8,000 | $8,240 | $8,487 | $8,742 |
| Landscaping & Snow Removal | $4,375 | $7,500 | $7,725 | $7,957 | $8,195 |
| Commongrounds LLC Owner Preferred Return | $10,313 | $10,313 | $10,313 | $10,313 | $10,313 |
| Operating Profit | $331,552 | $1,055,906 | $1,105,621 | $1,121,281 | $1,137,316 |

#### (U) Disqualification Events

Neither The Company nor any individual identified by Section 227.503(a) of Regulation Crowdfunding is the subject of a disqualifying event as defined by Section 227.503 of Regulation Crowdfunding.

#### Explanation

A company is not allowed to raise money using Regulation Crowdfunding if certain designated people associated with the Company (including its directors or executive officers) committed certain prohibited acts (mainly concerned with violations of the securities laws) on or after May 16, 2016. (You can read more about these rules in the Educational Materials.) This item requires a company to disclose whether any of those designated people committed any of those prohibited acts before May 16, 2016.

# (V) Updates on the Progress of the Offering

To track the investment commitments we’ve received in this Offering, click to see the Progress Bar.

# (W) Annual Reports for the Company

The Company will file a report with the Securities and Exchange Commission annually and post the report on our website no later than 120 days after the end of each fiscal year. It’s possible that at some point, the Company will not be required to file any more annual reports. We will notify you if that happens.

# (X) Our Compliance with Reporting Obligations

The Company has never raised money using Regulation Crowdfunding before, and therefore has never been required to file any reports.

# (Y) Other Information Prospective Investors Should Know About

The Issuer may offer “Perks” as a means of showing appreciation to investors for supporting small community businesses. The offering of “Perks” by issuers is done purely on a voluntary basis and have no influence upon the terms of the Offering. As such, Investor “Perks” are not contractual conditions governed by “the Note” and are not enforceable under “the Note”.

# Additional Information Included in the Form C

|  | Most recent fiscal year- end (tax returns) | Prior fiscal year-end (tax returns) |
| --- | --- | --- |
| Total Assets | $77,330.95 | $0 |
| Cash & Cash Equivalents | $0 | $0 |
| Accounts Receivable | $0 | $0 |
| Short-term Debt | $0 | $0 |
| Long-term Debt | $165,325.03 | $0 |
| Revenues/Sales | $0 | $0 |
| Cost of Goods Sold | $0 | $0 |
| Taxes Paid | $0 | $0 |
| Net Income | $-106,146.08 | $0 |

Jurisdictions in which the Company intends to offer the securities:

AL, AK, AZ, AR, CA, CO, CT, DE, DC, FL, GA, HI, ID, IL, IN, IA, KS, KY, LA, ME, MD, MA, MI, MN, MS, MO, MT, NE, NV, NH, NJ, NM, NY, NC, ND, OH, OK, OR, PA, RI, SC, SD, TN, TX, UT, VT, VA, WA, WV, WI, WY, BS, GU, PR, VI, IV

**Attachment 2:** `commgrounds2_invcert.pdf`

THIS C-3 INVESTMENT CERTIFICATE AGREEMENT ("C-3 INVESTMENT CERTIFICATE") HAS BEEN ACQUIRED BY THE INVESTOR SOLELY FOR ITS OWN ACCOUNT FOR THE PURPOSE OF INVESTMENT AND NOT WITH A VIEW TO OR FOR SALE IN CONNECTION WITH ANY DISTRIBUTION THEREOF IN VIOLATION OF THE SECURITIES ACT AND APPLICABLE STATE SECURITIES LAWS. THIS CERTIFICATE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OR QUALIFIED UNDER ANY STATE SECURITIES LAWS AND MAY NOT BE SOLD, OFFERED FOR SALE, PLEDGED, OR HYPOTHECATED IN THE ABSENCE OF SUCH REGISTRATION OR QUALIFICATION OR AN OPINION OF COUNSEL OR OTHER EVIDENCE SATISFACTORY TO THE COMPANY THAT SUCH REGISTRATION OR QUALIFICATION IS NOT REQUIRED.

# COMMONGROUNDS COOPERATIVE

# C-3 INVESTMENT CERTIFICATE AGREEMENT

This C-3 Investment Certificate Agreement is made and entered into as of (the "Effective Date"), by and between Commongrounds Cooperative, a Michigan nonprofit corporation organized under the Consumer Cooperative Act, MCL 450.3100, et seq (the "Company") and ________________ (the "Investor"). This C-3 Investment Certificate is one in a series of C-3 Investment Certificates (collectively, with this C-3 Investment Certificate, the "C-3 Investment Certificates") being issued by the Company to investors pursuant to the terms of the offering materials (as supplemented or amended from time to time) (the "Offering Materials") available to the Investor on the company offering profile at https://mainvest.com (the "Company Offering Profile") pursuant to which the Company will raise up to an aggregate amount of $1,000,000 from such investors (the "Offering"). Accordingly, the Company and the Investor agree as follows:

# Section 1. Purchase of C-3 Investment Certificate; Investment Amount.

In consideration for the purchase of this C-3 Investment Certificate, the Investor shall pay to the Company the amount of $________ (the "Original Purchase Price"). This amount shall be paid within five (5) days of the Effective Date.

# Section 2. Acknowledgement of the Company Agreements.

The business and affairs of Company are governed by Company's Articles of Incorporation and Bylaws, and any and all exhibits and amendments thereto, as well as a Membership Agreement, under separate cover, which the Investor has become a party to (collectively, the "Company Agreements"). The Investor understands and agrees that his, her, or its ownership of this C-3 Investment Certificate will be governed by the terms of the Company Agreements, which the Investor acknowledges and agrees to be bound by in full.

# Section 3. Dividends.

The Investor in the C-3 Investment Certificate shall be entitled to receive cumulative dividends at the rate of ___% of the Original Purchase Price per annum, commencing in 2023 (the "Annual Dividend"). In the first year dividends are paid, dividends shall be pro-rated for the length of time remaining in the calendar after the building receives its certificate of occupancy. Commongrounds may offer investors the option to receive the dividend or re-invest it in Commongrounds.

# Section 4. Payments of Annual Dividend.

All payments of the Annual Dividend shall be paid by electronic ACH transfer to an account in the name of the Company (the "Holding Account"), for further distribution to the Investor within 90 days of the end of each applicable calendar year. The Company may make quarterly

INVESTMENT CERTIFICATE

PAGE 1 OF 10

payments toward dividends in the option of the Company, and in the first year dividends are paid, dividends shall be pro-rated for the length of time remaining in the calendar after the building receives its certificate of occupancy. For the avoidance of doubt, a payment will be considered paid by the Company when the Company has completed payment into the Holding Account by electronic means for further distribution to the Investor.

The Investor agrees to maintain an account with an online portal or other agent designated by the Company with current payment information necessary for payments to the Investor to be completed. All such payments to the Investor shall be deposited into the Investor's linked account, or through any other payment method agreed upon by the Company and the Investor.

To the extent that any payment of the Annual Dividend is not paid within five (5) business days of such payment becoming due to the Investor, and the delay is not excused, the Company shall be assessed a late payment charge at an annual rate equal to five percent (6%) based on the number of days elapsed out of a 365 day calendar year. A delay shall be excused under this paragraph to the extent it is due to events outside of the Company's control, including without limitation an act of God or the actions or inactions of a third-party payment processor or the Investor, provided that the Company will take all reasonable efforts to make the payment as soon as practicable. This late payment charge shall be cumulative and assessed once per year against the unpaid amounts due to the Investor from the Company from the due date until the date of payment thereof and shall accrue and be added to any balance of unpaid amounts subject to late payment.

#### **Section 5. Buy-Out Right of the Company.**

The Company may, in its sole discretion, at any time after the Effective Date of this C-3 Investment Certificate, buy out the Company's obligations to the Investor under this C-3 Investment Certificate and terminate this C-3 Investment Certificate by paying into the Holding Account for further distribution to the Investor an amount equal to the Original Purchase Price plus any accrued and unpaid dividends thereon.

#### **Section 6. Buy-Out Right of the Investor.**

At any time after the fifth full calendar year following the Effective Date of this C-3 Investment Certificate, the Investor may require repayment from the Company of the Original Purchase Price of this C-3 Investment Certificate, together with all accrued and unpaid dividends thereon (contingent on the ability of the Company to pay pursuant to its governing documents). Upon repayment of the applicable amount outlined herein, the Company shall be forever released from all of its obligations under this C-3 Investment Certificate.

#### **Section 7. Miscellaneous.**

7.1 Notices. All notices, demands and other communications given or made pursuant hereto shall be in writing and shall be deemed to have been duly given on the date delivered, if delivered personally, or on the third business day after being mailed by registered or certified mail (postage prepaid, return receipt requested), in each case, to the parties at the following addresses (or at such other address for a party as shall be specified by notice given in accordance with this Section 7.1):

if to the Company, to:

Commongrounds Cooperative  
Attn: Kate Redman  
425 Boardman Ave, Suite C  
Traverse City, Michigan, 49684

INVESTMENT CERTIFICATE

PAGE 2 OF 10

kate@commongrounds.coop

if to the Investor, to: the address set forth on the signature page hereto or the Investor's registered email address with the Company.

**7.2. Successors and Assigns.** Subject to the restrictions on transfer described in Section 7.3 below, the rights and obligations of the Company and the Investor shall be binding upon and benefit the successors, assigns, heirs, administrators and transferees of the parties. Whenever in this C-3 Investment Certificate reference is made to the Company or the Investor, such reference shall be deemed to include, as applicable, a reference to their respective permitted successors, assigns, heirs, administrators or transferees.

**7.3. Transfer.** This C-3 Investment Certificate may be transferred only upon its surrender to the Company for registration of transfer, duly endorsed, or accompanied by a duly executed written instrument of transfer in form satisfactory to the Company. Thereupon, this C-3 Investment Certificate shall be reissued to, and registered in the name of, the transferee, or a new C-3 Investment Certificate for like purchase amount and dividend rights shall be issued to, and registered in the name of, the transferee. Dividends shall be paid solely to the registered Investor in this C-3 Investment Certificate. Such payment shall constitute full discharge of the Company's obligation to pay such dividends.

**7.4. Modification or Amendment.** Any provision of this C-3 Investment Certificate may be amended or modified only upon the written consent of the Cooperative Board of the Company and the majority of a quorum of the Investors in C-3 Investment Certificates, with a vote held according to the notice and voting procedures as outlined in the Company Agreements.

**7.5. Consent to Electronic Delivery.** The Investor hereby agrees that the Company may deliver all C-3 Investment Certificates, notices, financial statements, tax information, valuations, reports, reviews, analyses or other materials, and any and all other documents, information and communications concerning the affairs of the Company, including, without limitation, information about the investment, required or permitted to be provided to the Investor under the C-3 Investment Certificate or hereunder by means of e-mail or by posting on an electronic message board or by other means of electronic communication. By entering into this C-3 Investment Certificate, the Investor consents to receive electronically all C-3 Investment Certificate, documents, communications, notices, contracts, and agreements arising from or relating in any way to the Investor's or the Company's rights, obligations or services under this C-3 Investment Certificate.

**7.6. Governing Law.** This C-3 Investment Certificate shall be governed by and construed in accordance with the laws of the State of Michigan, without regard to the conflicts of laws principles thereof.

**7.7. Severability.** Wherever possible, each provision of this C-3 Investment Certificate which has been prohibited by or held invalid under applicable law shall be ineffective to the extent of such prohibition or invalidity, but such prohibition or invalidity shall not invalidate the remainder of such provision or the remaining provisions of this C-3 Investment Certificate.

**7.8. Counterparts.** This C-3 Investment Certificate may be executed in counterparts, each of which shall be deemed an original, but both of which shall constitute one and the same C-3 Investment Certificate.

**7.9. Further Assurances.** Each party hereto will use all reasonable efforts to take, or cause to be taken, all actions and do, or cause to be done, all other things necessary, proper or appropriate under applicable laws, regulations and contracts to consummate and thereafter make effective the transactions contemplated by this C-3 Investment Certificate.

INVESTMENT CERTIFICATE

PAGE 3 OF 10

7.10. Community Owner. In order to invest in Commongrounds Cooperative, Investor agrees to purchase a one-time $50 share to become a Community Owner. Investor hereby agrees to the terms of membership. Commongrounds may require investor to complete an application and share agreement before receiving dividends. At the time of buy-out, any funds being paid to Investor will first be applied to pay any remaining unpaid portion of the $50 share purchase before funds are returned to the Investor (i.e., if Investor is entitled to $250 at buy-out but has not previously paid for their $50 share, then at the time of buy-out Commongrounds will apply $50 to the share purchase and pay the remaining $200 balance to Investor).

IN WITNESS WHEREOF, the Company has caused this to be issued as of the Effective Date.

COMPANY
Commongrounds Cooperative

Date: 12/20/22

By: Kate Redman
Its: Authorized Representative

INVESTOR'S COUNTERPART SIGNATURE PAGE TO C-3 INVESTMENT CERTIFICATE

The undersigned Investor agrees to be bound by the terms of the C-3 Investment Certificate of Commongrounds Cooperative, a Michigan nonprofit corporation organized under the Consumer Cooperative Act, MCL 450.3100, et seq (the "Company"), executed by the Company in favor of the undersigned Investor, and agrees to all of the terms thereof.

MEMBER

Date: ________________________

________________________

Member Name:

Tax ID: ________________________

Street Address: ________________________

City, State, Zip: ________________________

Phone Number: ________________________

Email: ________________________

INVESTMENT CERTIFICATE

PAGE 4 OF 10

## SUBSCRIPTION AGREEMENT

Commongrounds Cooperative
Attn: Kate Redman
425 Boardman Ave, Suite C
Traverse City, Michigan, 49684
kate@commongrounds.coop

Commongrounds Cooperative, a Michigan nonprofit corporation organized under the Consumer Cooperative Act, MCL 450.3100, et seq, (the "Company"), is offering C-3 non-voting investment certificates of the Company (collectively, the "C-3 Investment Certificates" and each, a "C-3 Investment Certificate") to certain investors in a Regulation Crowdfunding offering (the "Offering"). The undersigned hereby subscribes for and agrees to purchase an aggregate investment amount of ________________ (the "Investment Amount"), on the terms and conditions hereinafter set forth and as set forth in the C-3 Investment Certificate and the governing documents of the Company. The undersigned acknowledges and understands that the net proceeds to the Company from the sale of the C-3 Investment Certificates will be used as set forth in those certain offering materials (as supplemented or amended from time to time) (the "Offering Materials") available to the undersigned on the company offering profile at https://www.mainvest.com (the "Company Offering Profile").

The undersigned understands that investment in the C-3 Investment Certificates involves a high degree of risk and is suitable only for Qualified Investors. The undersigned further understands that the C-3 Investment Certificates are being offered in reliance upon an exemption from registration provided by the federal Securities Act of 1933, as amended (the "Securities Act"), as set forth in Section 4(a)(6) and in accordance with Section 4A and Regulation Crowdfunding (Section 227.100 et seq.). Accordingly, the undersigned hereby represents and warrants to the Company and intends that the Company rely upon these representations and warranties for the purpose of establishing the acceptability of this subscription offer, as follows:

1. The undersigned is familiar with the nature of, and the risks attendant to, an investment of the type described in the Offering Materials and this Subscription Agreement, the tax consequences of such an investment, and is financially capable of bearing the economic risk of investing in the Company and can afford the loss of the total amount of such investment. The undersigned fully understands the risks involved with an investment in the Company, including, without limitation, the risks identified in the Offering Materials, incorporated by reference herein.
2. The undersigned has received, carefully read and understands the Offering Materials. The undersigned has had a full opportunity to review the information in the Offering Materials and to consult with his, her or its independent legal, financial, accounting, tax and other professional advisors regarding the information set forth in the Offering Materials with respect to his, her or its investment in the C-3 Investment Certificates.
3. The undersigned is purchasing the C-3 Investment Certificates for his, her or its own account for investment only and not with a view to the distribution or resale thereof to anyone else.

SUBSCRIPTION AGREEMENT

PAGE 1 OF 5

4. The undersigned understands that (i) no state or federal governmental authority has made any finding or determination concerning the merits of a purchase of the C-3 Investment Certificates and (ii) neither the offer nor the sale of the C-3 Investment Certificates has been registered under the Securities Act, or any other applicable securities laws, and that the C-3 Investment Certificates are being sold in reliance upon exemptions thereunder. The undersigned acknowledges that the Company has disclosed in writing to him, her or it that the transferability of the C-1 Investment Certificates is severely limited and that the undersigned must continue to bear the economic risk of this investment for an indefinite period unless the sale or transfer thereof is subsequently registered under the Securities Act and applicable state securities laws or an exemption from such registration is available, and that during the period in which the C-3 Investment Certificates are being offered and sold by the Company, and for a period of twelve months from the date of the last sale by the Company of the C-3 Investment Certificates in the Offering, all permitted resales of all or any part of the C-3 Investment Certificates, by any person, shall be made only in accordance with Rule 501(a) of Regulation Crowdfunding (Section 227.501(a)).

5. The undersigned agrees that the undersigned will not, directly or indirectly, offer, sell, pledge, transfer, or otherwise dispose of (or solicit any offers to buy, purchase, or otherwise acquire or take a pledge of) the C-3 Investment Certificates except in compliance with the C-3 Investment Certificates, the Securities Act and Rule 501(a) of Regulation Crowdfunding (Section 227.501(a)) thereunder.

6. The undersigned acknowledges that the Company has made available to him, her or it the opportunity to ask questions and receive answers concerning the Company, the C-3 Investment Certificates, the Company's Membership Agreement, the Offering Materials, this Subscription Agreement and any other information provided by the Company to the undersigned. The undersigned understands that it is his, her or its responsibility to inquire of the Company concerning disclosure of facts that the undersigned deems material to his, her or its decision to invest in the Company and purchase the C-3 Investment Certificates.

7. The undersigned has made his, her or its own inquiry and analysis (on his, her or its own or with the assistance of others) with respect to the Company, the C-3 Investment Certificates, the Company's Membership Agreement, the Offering Materials, this Subscription Agreement and other material factors affecting the C-3 Investment Certificates and/or the Company. Based on such information and analysis, the undersigned has been able to make an informed decision to subscribe for the C-3 Investment Certificates.

8. The undersigned: (i) does not have an overall commitment to investments that are not readily marketable that is disproportionate to his, her or its net worth, and his, her or its acquisition of the C-3 Investment Certificates will not cause such overall commitment to become excessive, and (ii) has adequate net worth and means of providing for his, her or its current needs and personal contingencies to sustain a complete loss of his, her or its investment in the C-3 Investment Certificates, and has no need for liquidity in the investment in the C-3 Investment Certificates.

9. There are restrictions on the undersigned's ability to cancel his, her or its investment

SUBSCRIPTION AGREEMENT

PAGE 2 OF 5

commitment in the C-3 Investment Certificates and obtain a return of his, her or its investment. The undersigned may cancel his, her or its investment commitment in the C-3 Investment Certificates for any reason up to forty-eight (48) hours after the Company's acceptance of this Subscription Agreement by its execution of the signature page hereto. If the undersigned has not canceled his, her or its investment commitment in the C-3 Investment Certificates prior to such deadline, the undersigned's subscription for the C-3 Investment Certificates shall be irrevocable by the undersigned, and the investment will be documented through the receipt of an executed copy of the C-3 Investment Certificates, which will also be recorded and maintained on the books of the Company.

10. The undersigned's investment in the C-3 Investment Certificates, together with any other investments made in any Regulation Crowdfunding offering during the 12-month period preceding the date of such transaction, does not exceed the maximum amount allowed by governing regulations.

11. The undersigned's principal residence (or principal office in the case of a corporation, limited liability company, partnership or trust) both at the time of the initial offer of the C-3 Investment Certificates to the undersigned and at present was and is within _______________.

12. The undersigned agrees that, notwithstanding the place where this agreement may be executed by any of the parties hereto, all the terms and provisions hereof shall be construed in accordance with and governed by the laws of the State of Michigan, without regard to principles of conflicts of laws.

13. The undersigned agrees that he, she or it shall become a party to the Membership Agreement of the Company, a copy of which has been provided to the undersigned, which provides for, among other things, the terms and conditions applicable to the C-3 Investment Certificates.

14. The undersigned understands that the undersigned has no right to require the Company to register the C-3 Investment Certificates under federal or state securities laws at any time.

15. Other than the fees to be paid to Mainvest by the Company (as discussed in the Offering Materials), no commission or other remuneration shall be paid to any person in connection with the offer or sale of the C-3 Investment Certificates.

16. The undersigned understands that nothing in the C-3 Investment Certificates, the Company's Membership Agreement the Offering Materials or any other materials presented to the undersigned in connection with the Offering constitutes legal, tax, or investment advice. The undersigned has consulted such legal, tax, and investment advisors, as he, she or it, in his, her or its sole discretion, has deemed necessary or appropriate in connection with this investment.

17. The undersigned acknowledges that any legal counsel for the Company is legal counsel solely for the Company regarding this investment and not for the undersigned and that the undersigned therefore may want to have its own legal counsel review the C-3 Investment Certificates (and related Offering Materials) before signing.

SUBSCRIPTION AGREEMENT

PAGE 3 OF 5

18. The undersigned hereby represents and warrants that he, she or it is not making an investment in the Company as a result of any advertisement, article, notice or other communication published in any newspaper, magazine or similar media, any seminar or any solicitation by a person not previously known to the undersigned. The undersigned acknowledges that an investment in the C-3 Investment Certificates is speculative and agrees that no guarantees have been made to the undersigned by the Company or any of their respective agents, managers, members, employees or affiliates, about an investment in the C-3 Investment Certificates or the future financial performance of the Company. The undersigned also acknowledges that in making an investment in the C-3 Investment Certificates, the undersigned is not relying upon any guaranty of the Company or any of its respective agents, managers, members, employees or affiliates. It is understood that information and explanations related to the terms and conditions of the C-3 Investment Certificates provided in the Offering Materials or otherwise by the Company shall not be considered investment advice or a recommendation to purchase the C-3 Investment Certificates, and that neither the Company, nor any of their respective affiliates is acting or has acted as an advisor to the undersigned in deciding to invest in the C-3 Investment Certificates. The undersigned acknowledges that neither the Company, nor any of their respective affiliates, has made any representation regarding the proper characterization of the C-3 Investment Certificates for purposes of determining the undersigned's authority to invest in the C-3 Investment Certificates.

19. The undersigned has reviewed the cautionary statements made in the Offering Materials about the Company's projected future financial information and other forward-looking statements, and has not relied upon such projections or forward looking information as if such projections and statements were guaranteed.

The undersigned recognizes that the Company shall have the right to reject this subscription, in whole or in part, for any reason whatsoever and return the subscription proceeds without interest. This Subscription Agreement shall be deemed to be accepted by the Company only when it is signed by an authorized representative of the Company. The undersigned agrees to indemnify and hold harmless the Company and its managers, members, employees, agents, representatives and affiliates, and any person acting on behalf of the Company, from and against any and all damage, loss, liability, cost and expense (including reasonable attorneys' fees) which any of them may incur by reason of the failure by the undersigned to fulfill any of the terms and conditions of this Subscription Agreement, or by reason of any misrepresentation or breach of warranty made by the undersigned herein or in any other document provided by the undersigned to the Company or its representatives. All representations, warranties and agreements contained herein shall survive the execution, delivery and acceptance of this Subscription Agreement and the undersigned's purchase of the C-3 Investment Certificates.

[Signatures Begin on Following Page]

SUBSCRIPTION AGREEMENT

PAGE 4 OF 5

IN WITNESS WHEREOF, the undersigned has executed this Subscription Agreement as of the signature date below.

**COMPANY**
**Commongrounds Cooperative**

Date: 12/20/22

By: Kate Redman
Its: Authorized Representative

**MEMBER**

Date: _________________

Name: _________________________

Tax ID: ________________________

Street Address: _________________

City, State, Zip: _________________

Phone Number: _________________

Email: _________________________

**NOTE: IF MEMBER IS NOT ALREADY A COMMUNITY OWNER, MEMBER MUST ALSO COMPLETE A CLASS C COMMUNITY OWNER APPLICATION (AVAILABLE AT WWW.COMMONGROUNDS.COOP/JOIN)**

SUBSCRIPTION AGREEMENT

PAGE 5 OF 5

![img-0.jpeg](img-0.jpeg)

## 2023 Community Owner/Member Application Terms & FAQ

***Welcome. We are so glad you are joining Commongrounds!***

### Terms of Application

1. 1. **Class C Membership Share.** Member is submitting an application for Community Owner Membership of Commongrounds Cooperative.
2. 2. **Share Purchase.** At the time of application, Members agree to pay the capital required to purchase a share in the Cooperative at the amount set by the Board of Directors (\$50 for 2018-2023). With this payment, you become and owner!
3. 3. **Bylaws.** The Cooperative is governed by bylaws adopted by the Board of Directors and members. They are available on our website. Members will also be required to sign a membership share agreement.
4. 4. **Approval and Share Agreement Required.** Membership is contingent on the Board of Directors determining the Applicant/Member is qualified to be a member. In addition, Member must sign a membership share agreement when requested by the Board. The bylaws and share agreement will provide the rights and obligations of Cooperative members.
5. 5. **Good Standing.** Members are entitled to hold the other benefits of membership of the Cooperative so long as the member remains a member in good standing. That requires meeting requirements set by the bylaws, share agreement, and the Board, including annual membership fees (no additional annual membership fee is required for 2018-2022.) Membership fees of \$48/annual will be required to remain in good standing in 2023.
6. 6. **Common Share Voting.** Each common share member in good standing is entitled to one vote on matters which the bylaws allow members to vote, including electing the community representatives to the Board of Directors.
7. 7. **Cooperative Rules.** Members must abide by the rules, policies, and Bylaws of the Cooperative, as they may be amended from time to time. Members may request that the Board of Directors provide a current copy to me at any time.
8. 8. **Warning! We're New.** The Cooperative is a new business venture in the early stages of development and member equity is subject to risk. Member's equity may not be returned, including if the business is not feasible or meets other challenges.
9. 9. **Keep a Copy.** Members should keep a copy of this Membership Application for their records.

## Community Share Membership FAQ

**What is Commongrounds Cooperative?** Commongrounds is a Michigan nonprofit, nonstock real estate cooperative based in Traverse City. Our mission is to build a more empowered community through cooperatively owned places that connect people and actively integrate wellness, arts, family and food. Our pilot project is a 4-story (proposed) mixed-use building at 414 E. 8th Street.

**What is a real estate cooperative?** Commongrounds Cooperative is a real estate development cooperative that offers everyone in our region the opportunity to participate in the ownership of building projects for the mutual benefit of our community and the building tenant-owners. In general, cooperatives are corporations that are owned by their “patrons”: people who use or purchase their facilities, services, or products. Cooperatives are owned by the people who use them and operate at cost. That means any cooperative “profit” is either reinvested in the property for the benefit of the cooperative community or returned to the tenant owners. Ten percent of our profits will be reserved to return to our community owners.

**What benefits do members receive?** You get to be a part of what is happening in the building! Community owners vote to elect representation on the cooperative board, and, through open-book management, help us choose our goals and track our progress. Plus, once the building is built, there will be special privileges and amenities available only to cooperative owners. Things like member-owner special events, receptions, and other owner-only amenities in the building that YOU help to choose...owner kayaks? Special bike parking? Shared electric cars? Shower access on the trail? We will be committed to continuously improving our member-owner experience. We’ll also have a crowdfunding campaign to raise funds for the building and only members will be able to invest.

**What does it mean to be an “owner” of the cooperative?** You own a “community owner” share of the cooperative. Once you pay your $50, it is one-time share purchase and you are an owner as long as the organization exists! To keep your membership active, there will be annual administrative fees. There will also be member-only opportunities to attend events, programming, and rent facilities in the building. You can learn more about your rights/duties as an owner at our annual meetings in April. But a few things are: You’ll be invited to annual open book meetings where you can learn about and share feedback on the financials of the cooperative. You’ll vote with other community owners to elect two seats to the board of directors. If the cooperative raises capital from its members, you will have the opportunity to invest in the cooperative (if you meet the criteria for potential investors).

**Who manages the cooperative?** Like other corporations, the Board retains most of the power to run the organization and make decisions, subject to authority it delegates to staff with oversight. The Commongrounds board will consist of representatives from commercial tenants (a majority of the board), community owners, residents, and the river. Certain big picture decisions also require approval by the tenant- or community owners.

**What does it take to be an “owner” of the cooperative?** You pay $50 to buy a share and sign a membership application and agreement. That’s it! On an annual basis, there will be an annual membership fee that is required to be eligible to vote in governance activities and to be eligible to participate or purchase other member amenities and facilities.

**Do I earn a profit because I own a share?** Nope. There may be future opportunities to invest in the cooperative and earn a return, but there is no economic return just because you are an owner.

You may also get some of the money back that you spend at the cooperative once we build the building: because we’re a cooperative, if we earn a profit on your use of the services and facilities provided by the cooperative, you’ll have a right to a return of a portion of that profit in proportion to your use. (Sounds confusing, we know. But we’ll help make it clear at our regular open book meetings!). And if you want more information in the meantime, here is a primer from our friends at the Sustainable Economies Law Center.

**Attachment 3:** `commgrounds2_appxbrisks.pdf`

# APPENDIX B: INVESTMENT RISKS

1

## YOU MIGHT LOSE YOUR MONEY

When you buy a certificate of deposit from a bank, the Federal government (through the FDIC) guarantees you will get your money back. Buying a Note is not like that at all. The ability of Commongrounds Cooperative to make the payments you expect, and ultimately to give you your money back, depends on a number of factors, including many beyond our control.

## LIMITED SERVICES

Commongrounds Cooperative operates with a very limited scope, offering only particular services to potential clients, making them vulnerable to changes in customer preferences.

## LACK OF ACCOUNTING CONTROLS

Larger companies typically have in place strict accounting controls. Smaller companies typically lack these controls, exposing themselves to additional risk.

## COMPETITION

The market in which we operate is highly competitive and could become increasingly competitive with new entrants in the market. Commongrounds Cooperative competes with many other businesses, both large and small, on the basis of quality, price, location, and customer experience. Changes in customer preference away from Commongrounds Cooperative's core business or the inability to compete successfully against the with other competitors could negatively affect Commongrounds Cooperative's financial performance.

## RELIANCE ON MANAGEMENT

As a securities holder, you will not be able to participate in Commongrounds Cooperative's management or vote on and/or influence any managerial decisions regarding Commongrounds Cooperative. Furthermore, if the founders or other key personnel of Commongrounds Cooperative were to leave Commongrounds Cooperative or become unable to work, Commongrounds Cooperative (and your investment) could suffer substantially.

## FINANCIAL FORECASTS RISKS

The financial forecasts provided by us herein are reasonable forecasts by us based upon assumption of stable economic conditions and other various assumptions regarding operations. The validity and accuracy of these assumptions will depend in large part on future events over which Commongrounds Cooperative and the key persons will have no control. Changes in assumptions or their underlying facts could significantly affect the forecasts. To the extent that the assumed events do not occur, the outcome may vary significantly from the projected outcomes. Consequently, there can be no assurance that the actual operating results will correspond to the forecasts provided herein. Additionally, Commongrounds Cooperative is a newly established entity and therefore has no operating history from which forecasts could be projected with.

## INABILITY TO SELL YOUR INVESTMENT

The law prohibits you from selling your securities (except in certain very limited circumstances) for 12 months after you acquire them. Even after that one-year period, a host of Federal and State securities laws may limit or restrict your ability to sell your securities. Even if you are permitted to sell, you will likely have difficulty finding a buyer because there will be no established market. Given these factors, you should be prepared to hold your investment for its

2

full term.

#### THE COMPANY MIGHT NEED MORE CAPITAL

Commongrounds Cooperative might need to raise more capital in the future to fund/expand operations, buy property and equipment, hire new team members, market its services, pay overhead and general administrative expenses, or a variety of other reasons. There is no assurance that additional capital will be available when needed, or that it will be available on terms that are not adverse to your interests as an investor. If Commongrounds Cooperative is unable to obtain additional funding when needed, it could be forced to delay its business plan or even cease operations altogether.

#### CHANGES IN ECONOMIC CONDITIONS COULD HURT COMMONGROUNDS COOPERATIVE

Factors like global or national economic recessions, changes in interest rates, changes in credit markets, changes in capital market conditions, declining employment, changes in real estate values, changes in tax policy, changes in political conditions, and wars and other crises, among other factors are unpredictable and could negatively affect Commongrounds Cooperative's financial performance or ability to continue to operate. In the event Commongrounds Cooperative ceases operations due to the foregoing factors, it can not guarantee that it will be able to resume operations or generate revenue in the future.

#### NO REGISTRATION UNDER SECURITIES LAWS

The Notes will not be registered with the SEC or the securities regulator of any State. Hence, neither Commongrounds Cooperative nor the Notes will be subject to the same degree of regulation and scrutiny as if they were registered.

#### INCOMPLETE OFFERING INFORMATION

Title III does not require us to provide you with all the information that would be required in some other kinds of securities offerings, such as a public offering of shares (for example, publicly-traded firms must generally provide investors with quarterly and annual financial statements that have been audited by an independent accounting firm). Although Title III does require extensive information, it is possible that you would make a different decision if you had more information.

#### LACK OF ONGOING INFORMATION

Commongrounds Cooperative will be required to provide some information to investors for at least 12 months following the offering. However, this information is far more limited than the information that would be required of a publicly-reporting company; and Commongrounds Cooperative is allowed to stop providing annual information in certain circumstances.

#### UNINSURED LOSSES

Although Commongrounds Cooperative will carry some insurance, Commongrounds Cooperative may not carry enough insurance to protect against all risks to the business. Additionally, there are some kinds of risks that are very difficult or impossible to insure against, at least at a reasonable cost. Therefore, Commongrounds Cooperative could incur an uninsured loss that could damage its business.

#### CHANGES IN LAWS

3

Changes in laws or regulations, including but not limited to zoning laws, environmental laws, tax laws, consumer protection laws, securities laws, antitrust laws, and health care laws, could negatively affect Commongrounds Cooperative's financial performance or ability to continue to operate. Specifically, any additional regulation on the industry could significantly negatively affect the business.

#### CONFLICT OF INTEREST WITH COMPANIES AND THEIR MANAGEMENT

In many ways, your interests and the interests of Commongrounds Cooperative's management will coincide: you both want Commongrounds Cooperative to be as successful as possible. However, your interests might be in conflict in other important areas, including these: You might want Commongrounds Cooperative to act conservatively to make sure they are best equipped to repay the Note obligations, while Commongrounds Cooperative might prefer to spend aggressively to invest in the business. You would like to keep the compensation of managers low, while managers want to make as much as they can.

#### FUTURE INVESTORS MIGHT HAVE SUPERIOR RIGHTS

If Commongrounds Cooperative needs more capital in the future and takes on additional debt or other sources of financing, the new investors might have rights superior to yours. For example, they might have the right to be paid before you are, to receive larger distributions, to have a greater voice in management, or otherwise.

#### THE COMPANY IS NOT SUBJECT TO THE CORPORATE GOVERNANCE REQUIREMENTS OF THE NATIONAL SECURITIES EXCHANGES

Any company whose securities are listed on a national stock exchange (for example, the New York Stock Exchange) is subject to a number of rules about corporate governance that are intended to protect investors. For example, the major U.S. stock exchanges require listed companies to have an audit committee made up entirely of independent members of the board of directors (i.e., directors with no material outside relationships with Commongrounds Cooperative or management), which is responsible for monitoring Commongrounds Cooperative's compliance with the law. Commongrounds Cooperative will not be required to implement these and other investor protections.

#### YOU HAVE A LIMITED UPSIDE

Notes include a maximum amount you can receive. You cannot receive more than that even if Commongrounds Cooperative is significantly more successful than your initial expectations.

#### YOU DO HAVE A DOWNSIDE

Conversely, if Commongrounds Cooperative fails to generate enough revenue, you could lose some or all of your money.

#### PAYMENTS AND RETURN ARE UNPREDICTABLE

Because your payments are based on the revenue of Commongrounds Cooperative, and the revenue of Commongrounds Cooperative can go up or down (or even disappear altogether) unpredictably, it is impossible to predict how much you will receive and when. And because the payments are unpredictable, so is your ultimate return.

#### THE NOTES ARE UNSECURED AND UNINSURED

4

The Notes are not secured by any collateral, nor are they guaranteed or insured by the FDIC or any other entity.

#### SUBORDINATION

The Notes shall be subordinated to all indebtedness of Commongrounds Cooperative to banks, commercial finance lenders, leasing and equipment financing institutions, and/or other institutions regularly engaged in the business of lending money.

#### LACK OF GUARANTY

The Notes are not personally guaranteed by any of the founders or any other person.

#### LIMITATION OF INDIVIDUAL RIGHTS IN EVENT OF DEFAULT

In the event of a default under the Notes, you will not be able to enforce your rights individually (for example, by bringing a lawsuit). Instead, a representative will be appointed according to the procedures set forth in the Note Indenture. It's possible that you will not like the representative, or that the representative will do things you believe are wrong or misguided. If an event of default has occurred and a representative has been appointed, all of the representative's reasonable expenses must be paid before any further payments are made with respect to the Notes.

#### COVID-19 IMPACT

The ongoing COVID-19 pandemic may impact the Company's ability to generate revenue and/or continue operations. If operations are ceased due to COVID-19 restrictions, the Company can not guarantee that it will resume operations in the future.

#### LIMITED OPERATING HISTORY

Commongrounds Cooperative is a newly established entity and has no history for prospective investors to consider.

5

**Attachment 4:** `commgrounds2_appxc.pdf`

# APPENDIX C: FINANCIAL STATEMENTS

1

# Commongrounds Cooperative and Affiliate

Financial Statements and Report

December 31, 2021

## Table of Contents

| Independent Accountant's Audit Report | 2 |
| --- | --- |
| Balance Sheet | 4 |
| Statement of Operations | 5 |
| Statement of Changes in Stockholders' Equity | 6 |
| Statement of Cash Flows | 7 |
| Notes to the Financial Statements | 9 |

![img-0.jpeg](img-0.jpeg)

## **Independent Auditor's Report**

Commongrounds Cooperative and Affiliate Traverse City, Michigan

### **Report on the Audit of the Financial Statements**

#### ***Opinion***

We have audited the financial statements of Commongrounds Cooperative and Affiliate, which comprise the balance sheets as of December 31, 2021, and the related statements of income, changes in stockholders' equity, and cash flows for the year then ended, and the related notes to the financial statements.

In our opinion, the accompanying financial statements present fairly, in all material respects, the financial position of Commongrounds Cooperative and Affiliate as of December 31, 2021, and the results of its operations and its cash flows for the year then ended in accordance with accounting principles generally accepted in the United States of America.

#### ***Basis for Opinion***

We conducted our audits in accordance with auditing standards generally accepted in the United States of America (GAAS). Our responsibilities under those standards are further described in the Auditor's Responsibilities for the Audit of the Financial Statements section of our report. We are required to be independent of Commongrounds Cooperative and Affiliate and to meet our other ethical responsibilities, in accordance with the relevant ethical requirements relating to our audits. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.

#### ***Responsibilities of Management for the Financial Statements***

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

In preparing the financial statements, management is required to evaluate whether there are conditions

2

or events, considered in the aggregate, that raise substantial doubt about Commongrounds Cooperative and Affiliate's ability to continue as a going concern within one year after the date that the financial statements are available to be issued.

# ***Auditor's Responsibilities for the Audit of the Financial Statements***

Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor's report that includes our opinion. Reasonable assurance is a high level of assurance but is not absolute assurance and therefore is not a guarantee that an audit conducted in accordance with GAAS will always detect a material misstatement when it exists. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control. Misstatements are considered material if there is a substantial likelihood that, individually or in the aggregate, they would influence the judgment made by a reasonable user based on the financial statements.

In performing an audit in accordance with GAAS, we:

- Exercise professional judgment and maintain professional skepticism throughout the audit.
- Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, and design and perform audit procedures responsive to those risks. Such procedures include examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements.
- Obtain an understanding of internal control relevant to the audit 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 Commongrounds Cooperative and Affiliate's internal control. Accordingly, no such opinion is expressed.
- Evaluate the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluate the overall presentation of the financial statements.
- Conclude whether, in our judgment, there are conditions or events, considered in the aggregate, that raise substantial doubt about Commongrounds Cooperative and Affiliate's ability to continue as a going concern for a reasonable period of time.

We are required to communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit, significant audit findings, and certain internal control-related matters that we identified during the audit.

Philip Debaugh, CPA

OWINGS MILLS, MD
October 21, 2022

3

# **Commongrounds Cooperative and Affiliate**

# Balance Sheet

As of December 31, 2021

|  | Note | 2021 $ |
| --- | --- | --- |
| Assets |  |  |
| Current Assets |  |  |
| Cash and cash equivalents |  | 558,503 |
| Restricted cash and cash equivalents, current | 2 | 1,442,414 |
| Other current assets | 3 | 41,040 |
| Total Current Assets |  | 2,041,957 |
| Property | 4 |  |
| Construction-in-progress building |  | 6,395,992 |
| Land |  | 1,000,000 |
| Total Property |  | 7,395,992 |
| Deferred tax assets | 1.g | 105,000 |
| Total Assets |  | 9,542,949 |
| Liabilities & Members' Equity |  |  |
| Liabilities |  |  |
| Current Liabilities |  |  |
| Accounts payable and accrued liabilities | 5 | 141,974 |
| Current maturities of long-term debt | 6 | 63,642 |
| Income tax liabilities, current | 1.g | 180,000 |
| Total Current Liabilities |  | 385,616 |
| Long-term debt | 6 | 5,897,061 |
| Deferred grant income | 8 | 1,503,991 |
| Total Liabilities |  | 7,786,668 |
| Members' Equity |  |  |
| Total Commongrounds Cooperative and Affiliate Members' Equity | 9 |  |
| Members' Class C certificates |  | 1,166,425 |
| Members' Class T-1 certificates |  | 1,023,356 |
| Members' Equity |  | 41,302 |
| Accumulated Deficit |  | (893,111) |
| Total Commongrounds Cooperative and Affiliate Members' Equity |  | 1,337,972 |
| Noncontrolling interests | 1.k | 418,309 |
| Total Stockholders' Equity |  | 1,756,281 |
| Total Liabilities & Stockholders' Equity |  | 9,542,949 |

4

# **Commongrounds Cooperative and Affiliate**  
Statement of Operations  
For the year ended December 31, 2021

|  | 2021 |
| --- | --- |
|  | $ |
| Operating Expenses |  |
| Salaries and wages | 104,599 |
| Legal and other professional fees and services | 145,677 |
| Memberships and licenses | 73,840 |
| Advertising and promotion | 22,169 |
| Insurance | 7,413 |
| Other operating expense | 13,670 |
| Total Operating Expenses | 367,368 |
| Operating Income (Loss) | (367,368) |
| Other Income (Expense) |  |
| Interest expense | (102,444) |
| Income (Loss) Before Provision (Benefit) for Income Taxes | (469,812) |
| Income tax expense (benefit) | 170,913 |
| Net Income (Loss) | (640,725) |
| Net income attributable to noncontrolling interests | 909 |
| Net Income (Loss) Attributable to Commongrounds Cooperative and Affiliate Stockholders | (639,816) |

5

# **Commongrounds Cooperative and Affiliate**  
 Statement of Changes in Stockholders' Equity  
 For the year ended December 31, 2021

|  | Members' Class C Certificates $ | Members' Class T-1 Certificates $ | Other Members' Equity $ | Accumulate d Deficit $ | Noncontrol ing interest $ | Total Members' Equity $ |
| --- | --- | --- | --- | --- | --- | --- |
| Balance at December 31, 2020 | 820,900 | 600,000 | 41,302 | (253,295) | 419,218 | 1,628,125 |
| Net income (loss) | - | - | - | (639,816) | (909) | (640,725) |
| Issuance of Membership Certificates, net of issuance costs | 345,525 | 423,356 | - | - | - | 768,881 |
| Return of member capital | - | - | - | - | - | - |
| Balance at December 31, 2021 | 1,166,425 | 1,023,356 | 41,302 | (893,111) | 418,309 | 1,756,281 |

6

# **Commongrounds Cooperative and Affiliate**

# Statement of Cash Flows

For the year ended December 31, 2021

|  | 2021 |
| --- | --- |
|  | $ |
| Cash Flows |  |
| Cash Flows From Operating Activities |  |
| Net income (loss) | (640,725) |
| Adjustments to Reconcile Net Income (Loss) to Net Cash Provided by (Used in) Operating Activities |  |
| (Gain) on debt extinguishment | - |
| Provision (benefit) for deferred taxes | 170,913 |
| Amortization of debt issuance costs | 2,955 |
| Total Adjustments to Reconcile Net Income (Loss) to Net Cash Provided by (Used in) Operating Activities | 173,868 |
| (Increase) decrease in operating assets, net of effects of businesses acquired |  |
| Other assets | 284 |
| Increase (decrease) in operating liabilities, net of effects of businesses acquired |  |
| Accounts payable and accrued liabilities | 136,674 |
| Deferred grant income | 1,503,991 |
| Net Cash Provided by (Used in) Operating Activities | 1,174,092 |
| Cash Flows from Investing Activities |  |
| Payments for construction in progress | (5,890,696) |
| Capitalized interest | (80,397) |
| Net Cash Provided by (Used in) Investing Activities | (5,971,093) |
| Cash Flows from Financing Activities |  |
| Proceeds from issuance of debt | 6,174,487 |
| Payments for debt issuance costs | (216,739) |
| Repayment of investor debt | (530,000) |
| Proceeds from issuance of Member Certificates, net | 768,881 |
| Net Cash Provided by (Used in) Financing Activities | 6,196,629 |
| Net Increase (Decrease) in Cash, Cash Equivalents, and Restricted Cash | 1,399,628 |
| Cash, cash equivalents, and restricted cash at beginning of year | 601,289 |
| Cash, Cash Equivalents, and Restricted Cash at End of Year | 2,000,917 |
| Reconciliation of Cash, Cash Equivalents, and Restricted Cash |  |
| Cash and cash equivalents | 558,503 |
| Current restricted cash and cash equivalents | 1,442,414 |
| Total Cash, Cash Equivalents, and Restricted Cash Shown in the Statement of Cash Flows | 2,000,917 |

# **Supplemental Cash Flow Information**

7

# **Commongrounds Cooperative and Affiliate**

# Statement of Cash Flows

For the year ended December 31, 2021

# **Cash Paid During the Year for**

Interest, net of capitalized interest

81,955

8

# Notes to the Financial Statements

# **Commongrounds Cooperative and Affiliate**

# Notes to the Financial Statements

For the year ended December 31, 2021

# **1. Summary of significant accounting policies**

# **a. Nature of operations**

Commongrounds Cooperative and Affiliate ("Commongrounds" or "the Cooperative") is organized as a Michigan non-profit corporation which operates for the purposes of community and real estate development and transforming real estate development by providing inclusive opportunity for community and tenant members to own and engage with all stages of a development, including planning, financing, ownership, and management; to design facilities for their benefit, use, and occupancy; and purposes and activities incidental and related to the foregoing purposes.

Commongrounds, LLC (the "LLC") is owned 60% by Commongrounds Cooperative. Accordingly, the financial statements of the two companies are consolidated and collectively referred to as the Cooperative. All intercompany accounts and transactions have been eliminated in consolidation.

# **b. Basis of presentation**

The accompanying financial statements have been prepared in accordance with U.S. generally accepted accounting principles (GAAP).

# **c. Use of estimates**

The preparation of the financial statements in conformity with accounting principles generally accepted in the United States of America (GAAP) 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 financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could materially differ from those estimates.

# **d. Fair value measurements**

Generally accepted accounting principles define fair value as the price that would be received to sell an asset or be paid to transfer a liability in an orderly transaction between market participants at the measurement date (exit price) and such principles also establish a fair value hierarchy that prioritizes the inputs used to measure fair value using the following definitions (from highest to lowest priority):

- Level 1 - Unadjusted quoted prices in active markets that are accessible at the measurement date for identical, unrestricted assets or liabilities.
- Level 2 - Observable inputs other than quoted prices included within Level 1 that are observable

9

# **Commongrounds Cooperative and Affiliate**

# Notes to the Financial Statements

For the year ended December 31, 2021

for the asset or liability, either directly or indirectly, including quoted prices for similar assets and liabilities in active markets; quoted prices for identical or similar assets and liabilities in markets that are not active; or other inputs that are observable or can be corroborated by observable market data by correlation or other means.

- Level 3 - Prices or valuation techniques requiring inputs that are both significant to the fair value measurement and unobservable.

The carrying amounts of financial instruments in the accompanying balance sheets approximate their fair values due to their relatively short-term nature.

# **e. Cash and cash equivalents**

# **i. Cash and short-term investments**

The Cooperative considers short-term, highly liquid investment with original maturities of three months or less at the time of purchase to be cash equivalents. There were no non-cash cash equivalents as of December 31, 2021. Cash consists of funds held in checking and savings accounts.

# **ii. Restricted cash**

Any cash that is legally restricted from use is recorded in restricted cash. Cash and deposits are considered restricted when they are subject to contingent rights of third parties. If the restriction on cash relates to acquiring a long-term asset, liquidating a long-term liability or is unavailable for a period longer than one year from the balance sheet date, the restricted cash is classified as a long-term asset. Otherwise, restricted cash is classified as a current asset.

# **f. Concentration and credit risk**

The Cooperative maintains its cash with a major financial institutions, which it believes to be credit worthy. The Federal Deposit Insurance Corporation insures balances up to $250,000. At times, the Cooperative may maintain balances in excess of the federally insured limits. Management does not believe the Cooperative is exposed to any significant risk as a result of these deposits.

# **g. Income Taxes**

The Cooperative applies ASC 740 Income Taxes ("ASC 740"). Deferred income taxes are recognized for the tax consequences in future years of differences between the tax bases of assets and liabilities and their financial statement reported amounts at each period end, based on enacted tax laws and statutory

10

# Commongrounds Cooperative and Affiliate

## Notes to the Financial Statements

For the year ended December 31, 2021

tax rates applicable to the periods in which the differences are expected to affect taxable income. Valuation allowances are established, when necessary, to reduce deferred tax assets to the amount expected to be realized. The provision for income taxes represents the tax expense for the period, if any and the change during the period in deferred tax assets and liabilities. ASC 740 also provides criteria for the recognition, measurement, presentation and disclosure of uncertain tax positions. A tax benefit from an uncertain position is recognized only if it is “more likely than not” that the position is sustainable upon examination by the relevant taxing authority based on its technical merit. The Cooperative is subject to tax filing requirements as a corporation in the federal jurisdiction of the United States. The Cooperative uses a December 31 year end for income tax reporting purposes and files a Corporate tax return annually. The Cooperative’s provision for income taxes is based on the asset and liability method of accounting whereby deferred tax assets and liabilities are recognized for future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. Deferred tax assets and liabilities are related to differences in calculating depreciation on fixed assets, timing of deductions for certain accrued expenses, and taxes related to net operating losses.

At December 31, 2020, the Cooperative had available net operating loss carryforwards totaling $420,090 that were used to offset 2021 federal taxable income. The Cooperative has recorded income tax expense of $170,913 for the year ended December 31, 2021. The Cooperative had a federal deferred tax asset of $105,000 at December 31, 2021.

### h. Property and equipment

Property and equipment is recorded at cost. Expenditures for additions, improvements and other enhancements to property, plant and equipment are capitalized, and minor replacements, maintenance, and repairs that do not extend asset life or add value are charged to expense as incurred. Depreciation is calculated using the straight-line method over estimated useful lives. When property, plant and equipment assets are retired or otherwise disposed of, the related cost and accumulated depreciation is removed from the accounts and any resulting gain or loss is included in results of operations for the respective period. Management reviews these assets for impairment whenever events or changes in circumstances indicate the related carrying amount may not be recoverable. Construction assets are depreciated once they are placed in service. Land is not depreciated. Interest is capitalized in connection with the construction of the building. The capitalized interest is recorded as part of the asset to which it relates and is amortized over the asset’s estimated useful life once placed in service. As of December 31, 2021 the construction-in-progress balance includes $80,397 in capitalized interest payments. As the construction-in-progress has yet to be placed into service there has been no accumulated depreciation

11

# Commongrounds Cooperative and Affiliate

## Notes to the Financial Statements

For the year ended December 31, 2021

or amortization of capitalized interest as of December 31, 2021.

### i. Grant income

The Cooperative recognizes government grants when there is reasonable assurance that the grant will be received. The Cooperative presents grant funds that have been received but not yet recognized as income as a gross deferred grant income liability on the balance sheet. Grants are recognized as other income in the statement of operations as the underlying assets that the grants fund are depreciated.

### j. Member Certificates

Commongrounds is organized on a non-stock, membership basis. Commongrounds has three voting membership certificate classes, Class C (community members), Class T-1 (tenant members), and Class R-1 (residential tenant members). Commongrounds also has one non-voting membership class, Class S (supporter members). There were no members' Class R-1 or Class S certificates issued at December 31, 2021.

### k. Non-controlling interest

The Cooperative's non-controlling interest in the LLC is reported in accordance with ASC 810-10, which states that a non-controlling interest in a subsidiary is an ownership interest in the consolidated entity that should be reported as equity, separate from the parent's equity, in the consolidated financial statements. In addition, consolidated net income should be adjusted to include the net income attributed to the non-controlling interests.

### l. Comprehensive income

The Cooperative does not have any comprehensive income items other than net income.

## 2. Restricted cash

The Cooperative records cash that is held in escrow or reserve accounts that are held for a specific purpose as restricted cash. Restricted cash as of December 31, 2021 consists of balances held in two accounts:

### a. CSB interest reserve

During construction, Commongrounds owed interest only payments to its primary lender, Coastal States Bank, based on the amount of funds that had been drawn during construction. Coastal States Bank

12

## Commongrounds Cooperative and Affiliate

### Notes to the Financial Statements

For the year ended December 31, 2021

required an interest reserve of $660,000 be deposited with the bank to hold for the duration of construction to ensure Commongrounds was able to make the required interest payments. On a monthly basis throughout 2021 after closing on financing, Commongrounds Cooperative authorized the bank to withdraw interest payments from this reserve. When construction is complete, any remaining interest reserve will be related back to Commongrounds or the bank will continue to hold the funds and draw the initial mortgage payments from the funds. Notably, the interest reserve is much larger than will actually be needed due to a change in the USDA regulations right before the loan closing. Previously, interest was due on the full loan amount but after the regulatory change, Commongrounds only paid interest on loan funds that were actually drawn and expended.

As of December 31, 2021 the balance in this account was $584,310

#### **b. Counterpointe construction escrow**

Pursuant to the requirements of state and local regulation for Property Assessed Clean Financing (PACE), the full loan amount was disbursed at loan closing and interest is paid on the full amount for the duration of the loan. The loan is held in escrow by the lender, Counterpointe, and disbursed for payment for permitted expenses throughout construction.

As of December 31, 2021 the balance in this account was $858,104.

#### **3. Other current assets**

Other assets consists of the following as of December 31, 2021:

|  | 2021 $ |
| --- | --- |
| Deposits | 22,000 |
| Non-trade receivables | 19,040 |
| Other current assets | 41,040 |

#### **4. Property**

The Cooperative continued buildout of its 4-story mixed-use building in Traverse City, Michigan during 2021. The land is owned by Commongrounds LLC and is valued at $1 million on a historical cost basis. The Cooperative has capitalized the construction work to date and will consider the building to put-in-service once it is open, at which point it will begin recognizing depreciation and amortizing the grant income that has funded the construction.

13

## Commongrounds Cooperative and Affiliate

### Notes to the Financial Statements

For the year ended December 31, 2021

As of December 31, 2021, construction was approximately 59% completed with occupancy expected for residential units by November 1, 2022 and for commercial units between December 2022-January 2023.

#### 5. Accounts payable and accrued liabilities

Accounts payable and accrued liabilities consist of the following:

|  | 2021 $ |
| --- | --- |
| Shareholder lease and build out costs deposit | 124,220 |
| Interest payable | 17,754 |
| Total | 141,974 |

During 2021, a Class T-1 shareholder paid up front for its unit and its associated buildout costs. In addition, it prepaid 6 years of Common Area Maintenance costs, taxes, and utilities. The prepaid costs are non-refundable but would be transferred with the share if the shareholder sold or otherwise transferred its share.

#### 6. Debt

Long-term debt consists of the following:

|  | $ |
| --- | --- |
| Loan payable to Coastal States Bank, variable interest equal to 5-Year Treasury Rate plus 4.25% with a floor of 5.50%. Loan requires interest only payments for first 18 months and fully amortized monthly installments over the remaining 342 months. Matures in February 2051. Loan is collateralized by all assets of the Cooperative. | 4,272,932 |
| PACE Special Assessment Loan with 5.80% interest per annum; payable in June and December Installments each year commencing on June 2, 2022. Matures December 2046. Loan is collateralized by real estate. | 1,850,000 |
| Debt covenant with Local Brownfield Revolving Fund; 10 year amortization at 2.5% interest | 51,555 |
| Less: Unamortized debt issuance costs | (213,784) |
| Total debt, net of debt issuance costs | 5,960,703 |
| Less: current portion | (63,642) |
| Long-term portion of debt, net of debt issuance costs | 5,897,061 |

14

# **Commongrounds Cooperative and Affiliate**

# Notes to the Financial Statements

For the year ended December 31, 2021

The Cooperative records debt issuance costs related to recognized debt liabilities as a deduction from the related debt obligations and are recognized as interest expense over the life of the debt. The Company has unamortized deferred debt issuance costs of $213,784 as of December 31, 2021.

Estimated future minimum principal repayments on long-term debt over the next five years are as follows:

|  | $ |
| --- | --- |
| 2022 | 63,642 |
| 2023 | 158,143 |
| 2024 | 169,245 |
| 2025 | 177,715 |
| 2026 | 187,726 |
| Total | 756,471 |

# **7. Commitments and contingencies**

The Cooperative is not currently involved with and does not know of any pending or threatening litigation against the Cooperative.

During 2021, the Cooperative entered into a debt agreement with IFF, a nonprofit corporation, for a loan in the amount of $1,500,000. Interest will be charged at 6.63% through August 31, 2027 and then adjusted on September 1, 2027 and again on September 1, 2032 based on the United States Treasury obligations. The loan will require interest only payments through October 2022 and then monthly principal and interest payments of $11,294 through maturity in September 2037. The loan is collateralized by real estate. As of December 31, 2021 there had been do draws taken on available funds under this loan agreement and consequently there is no corresponding debt on the balance sheet.

# **8. Grants**

In December 2020, the Cooperative received a grant of $1,500,000 from the Michigan Strategic Fund ('MSF Grant') under the Michigan Community Revitalization Program. MEDC CRP funds were released to Coastal States Bank with a written agreement between Coastal States Bank and MEDC. Commongrounds is not entitled to use of any of the grant funds unless approved and released by Coastal States Bank as consistent with the restrictions and limitations in the MEDC CRP grant agreement and the Banks' construction loan inspection and disbursement process. MEDC CRP funds were approved for use for certain specific hard and soft costs associated with construction.

In December 2020, the Cooperative received a $210,000 grant from the Local Brownfield Redevelopment

15

## Commongrounds Cooperative and Affiliate

### Notes to the Financial Statements

For the year ended December 31, 2021

Fund ('Brownfield Grant') in connection with the construction of a new commercial and residential development. Funding is received as applicable construction costs are incurred. The grant funds were to be used for specific activities related to the removal of contaminated soil and vapor mitigation. Commongrounds was only entitled to receive the grant funds as reimbursement for expenditures related to those specific activities.

The amounts of deferred income recognized under each of these grants as of December 31, 2021 is as follows:

|  | $ |
| --- | --- |
| MSF Grant | 1,293,891 |
| Brownfield Grant | 210,000 |
| Total deferred grant income | 1,503,991 |

## 9. Membership Share Certificates

### a. Description of Class T-1 Patron-Member Certificates

The Cooperative's Articles and Bylaws allow for the creation of a T-1 Patron-Member class, whose members must purchase a T-1 Patron-Membership Share that is tied to a 99-year renewable lease for a unit in the facilities operated by the Cooperative in Traverse City, Michigan. The purpose of becoming a T-1 Patron-Member of Commongrounds is to assure access to the goods, services and facilities of Commongrounds, and not to gain profit. The T-1 Members are not entitled to and have no expectation of annual dividends. Each T-1 Patron-Member Certificate is entitled to one (1) vote and has the right to notice of member meetings, as provided in the Articles of Incorporation and Bylaws. In 2020, the Cooperative entered into agreements with five patrons totaling $600,000 for T-1 Certificates.

During 2021, a Class T-1 shareholder prepaid certain unit and occupancy costs (refer to Note 5). The Cooperative received additional T-1 investment totaling $332,086 from two new investors.

### b. Share capital

The Cooperative has an unlimited number of authorized preference shares and common shares. The preference shares may be issued from time to time in one or more series, each series comprising the number of shares, designations, rights, privileges, restrictions and conditions determined by the Board of Directors.

Preference shares are non-voting and rank in priority to the common shares with respect to dividends

16

# Commongrounds Cooperative and Affiliate

## Notes to the Financial Statements

For the year ended December 31, 2021

and distributions upon dissolution. No preference shares have been issued.

Common shares carry one vote each and participate equally in the earnings of the Cooperative and the net assets of the Cooperative upon dissolution. Dividends are payable on the common shares as and when declared by the Board of Directors.

### c. Class C Patron-Member

Any patron may apply for admission to the Cooperative as a Class C Member and purchase a share of common voting stock at the price set by the Board. Each Class C Member is entitled to one (1) vote and has the right to notice of member meetings, as provided in the Articles of Incorporation and Bylaws. In 2021, the Cooperative continued to gain Class C Shareholders (purchasing a share for $50) and opened another round of equity investment opportunity for Class C Shareholders, receiving additional equity investment as shown in the financial statements.

### 10. Subsequent Events

In 2022, construction continued on the building with a target of completing construction and opening the building in December 2022 or January 2023. Commongrounds continued to draw on its available loan funds from Coastal States Bank, PACE, and IFF to fund construction and paid interest on the loans. It anticipates fully drawing on all loan funds by the end of 2022 ($8,000,000 from Coastal States Bank, $1,500,000 from IFF, and $1,850,000 in PACE financing). IFF approved extending the interest only payment period to April 1, 2023; Coastal States Bank is pending review for doing the same (to accommodate the unexpected construction delays). It also made expenditures related to administrative, marketing, and communications in anticipation of building opening. It hired a Chief Executive Officer, Leslie Donaldson, to lead the operation of the building once complete and open. It incurred a short-term, unsecured bridge loan in the amount of $200,000 from a C-1 Shareholder, Denis Pierce, to assist with cash flow during construction. It continued to accept equity investment through Regulation CF investment crowdfunding from its C-1 shareholders for a total of $430,500 received in 2021 and 2022. It is pursuing additional grant and loan funding to cover the cost of increased construction costs that arose from construction needs and COVID-related labor and supply chain delays in construction.

Management evaluated all activity through October 21, 2022 (the issuance date of the financial statements) and concluded that no other subsequent events have occurred that would require recognition in the financial statements or disclosure in the related notes to the financial statements.

17

**Attachment 5:** `commgrounds2_deck.pdf`

Commongrounds Investment Winter 2023

**THE NEST  
IS YET  
TO COME.**

![img-0.jpeg](img-0.jpeg)

![img-1.jpeg](img-1.jpeg)

## *Hello, we're Commongrounds Cooperative*

Commongrounds is a nonprofit real estate cooperative in Traverse City, Michigan owned by its tenants and 850+ community members. Our pilot project at 414 East Eighth Street is a 4-story, 47,000 square foot, mixed-use sustainable development scheduled to open to the public in the Spring of 2023. Commongrounds develops real estate that meets community needs and increases quality of life in the region. Together with individuals and organizations, we forge a path toward building the Traverse City we want to see today and in 50 years.

We believe in working towards a triple bottom line, one that sustains our community, environment, and profit, by integrating wellness, arts, family, and food to improve quality of life in our region.

![img-2.jpeg](img-2.jpeg)

WELLNESS

![img-3.jpeg](img-3.jpeg)

ARTS

![img-4.jpeg](img-4.jpeg)

FAMILY

![img-5.jpeg](img-5.jpeg)

FOOD

## *Together, we've already made a difference.*

Commongrounds is more than a real estate project: it is an innovative way for real estate to be designed as physical and social infrastructure financed and owned by the community it serves.

As a part of two investment crowdfunding campaigns--one in 2019 and one in 2021--we invited our community to each risk a little bit so we could all share in the rewards of investing in our community together. Our community owners answered the call and surpassed our expectations--we raised $1.37 million from 498 community owners, with a median investment of more than $2,500.

*These investors will earn not just a financial return but also a social and quality of life return by investing in real estate in their own backyard.*

***Will you join them?***

**We are so close! Exterior progress on Commongrounds as of 12/2022**

![img-6.jpeg](img-6.jpeg)

![img-7.jpeg](img-7.jpeg)

# Funding

## PHASE I & II - THE BUILDING

**Goal: $15,672,642**

**Completed August 8, 2022**

In Phase I & II of our financing, we used the community investment to leverage the rest of the funding needed to build the building. Commongrounds has almost raised the project cost of $15,672,642 from a shared effort by local investors, local nonprofits and small business, governmental support, and bank financing. Here is the current status of our funding sources:

This Project Cost: $15,672,642

![img-8.jpeg](img-8.jpeg)

## PHASE III - MAKE THIS HOUSE A HOME

**Up to $500,000**

**Launched January 20, 2023**

We've raised the money we need to build a building - but your investment in Phase III will make it even better, ensuring long-term sustainability for a place our community can all call home.

![img-9.jpeg](img-9.jpeg)

## Why we're continuing to raise capital

A key part of the Commongrounds mission is for everyone in our community to have the opportunity build wealth by investing and being a part of making the community we love even better, together.

Thanks to our successful 2019 and 2021 community investment campaigns, we now have a building that is nearly complete, but investments in our 2023 campaign will help us to continue to create opportunity for community members to join us as we grow.

We will use funding we raise to help launch the project and open its doors, ensuring long-term sustainability for the building and enhance the impact on our community. For example, your investment might support:

- Solar and additional green infrastructure, teaching kitchen completion, a marquee, and other build-out items supporting the community and tenant-owners.
- Community amenities focused on families, food, arts & wellness - such as family play and wellness spaces and public art.
- Additional staffing to help us ensure the building is ready from the first day it opens in the Spring of 2023 to serve our tenants and community members.

![img-10.jpeg](img-10.jpeg)

![img-11.jpeg](img-11.jpeg)

## *So, what's a COOP?*

3 key principles guide a COOP:

- An organization owned and governed by the people who use the goods, services, or property it provides
- Profit returned to the owners in proportion to how much they spent (“patronage”)
- 1 owner/member, 1 vote

***850+ COOP members to date!***

![img-12.jpeg](img-12.jpeg)

## *Who owns Commongrounds, and who makes decisions?*

There are two classes of ownership:

One for **commercial tenant-owners** who purchase their units in the building, and one for **community members**.

These owners elect a board who make big picture decisions and hire staff to operate the cooperative on a day-to-day basis.

Learn more on our website.

***commongrounds.coop***

![img-13.jpeg](img-13.jpeg)

![img-14.jpeg](img-14.jpeg)

commongrounds

## Ground Floor

NoBo Mrkt Food Hall: High quality craft, farm-to-table food and beverages with riverside seating to support the activities of tenants and general public

- ◦ Incubate food entrepreneurs and increase equity in food system.
- ◦ Partnership between Tony Vu (Good Bowl chef), Higher Grounds, Iron Fish Distillery.
- ◦ Local culinary offereings from 9 Bean Rows, Leelanau Cheese, and others.

Northern Blooms Montessori Family Center

- ◦ A hub for early childhood education, teacher training, and family support.

![img-15.jpeg](img-15.jpeg)

## Second Floor

- The Alluvion. 150-seat black box space for performing arts, meetings, and education.
- Commonplace Coworking and Office Space. Meeting and workspace will serve nonprofit and business working in food, arts, wellness, family.
- Groundwork Center for Community Resilience Teaching Kitchen. Culinary medicine teaching kitchen seating 10-20 people.
- Multi-Modal Amenities. Bathrooms with showers and storage located onsite for workers.

![img-16.jpeg](img-16.jpeg)

Second Level Plan

## Third + Fourth Floor

- **Residential Units.** Up to 24 residential rental units: studio, 1 and 2 bedroom. Long-term and retreat/short-term use.
- **High-Quality Green Design.** Energy efficient, thoughtful design using high-quality materials to create liveable, efficient living space.
- **Affordable Income-Based Housing.** Estimated 1⁄4 units serving 60% area median income, 1⁄4 units serving 80% area median income, 1⁄4 100%, and 1⁄4 units market rate.
- **Shared amenities.** Tenants have access to outdoor balconies, wellness/exercise, laundry, guest rooms.

![img-0.jpeg](img-0.jpeg)

## *Partners*

![img-1.jpeg](img-1.jpeg)

![img-2.jpeg](img-2.jpeg)

![img-3.jpeg](img-3.jpeg)

![img-4.jpeg](img-4.jpeg)

**NoBo Mrkt**

![img-5.jpeg](img-5.jpeg)

*Iam usi*

![img-6.jpeg](img-6.jpeg)

**Attachment 6:** `commgrounds2_transcript.pdf`

00:09  
well first of all this place is an idea  
00:12  
that matters it's super exciting so  
00:15  
we'll have a four-story building that is  
00:17  
owned by the community and funded in  
00:20  
part by the community common grounds is  
00:22  
Traverse City's first real estate  
00:24  
cooperative and we're constructing a  
00:26  
four-story mixed-use building on East  
00:28  
8th Street it's the opportunity for  
00:31  
everyone in the community to invest and  
00:33  
make decisions today that helped build a  
00:35  
Traverse City that will be better for  
00:37  
our kids and our grandkids so you walk  
00:39  
into the building and it's a bright open  
00:41  
space a space where people can be and  
00:43  
you can go over to higher ground to get  
00:45  
a cup of coffee on the river or go get  
00:47  
something to drink or eat at iron fish  
00:49  
distillery there'll be a place for kids  
00:51  
with pathways preschool the way that we  
00:54  
are providing childcare is gonna be that  
00:57  
much more accessible upstairs you'll

01:00  
find a listening room and Center for the  
01:02  
Arts and there will also be commonplace  
01:04  
a co-working environment for small  
01:07  
businesses and nonprofits the third and  
01:09  
fourth floor will provide much needed  
01:11  
workforce housing this project squarely  
01:14  
addresses challenges that the  
01:16  
communities facing from childcare to  
01:19  
affordable housing for the workforce as  
01:22  
tenant partners we're all figuring out  
01:24  
how to work together and then we've  
01:25  
already got three hundred and  
01:26  
thirty-some members and that's going to  
01:28  
keep growing so the community are  
01:29  
literally owners of the building and  
01:31  
have a say in how its run that to me is  
01:33  
utterly transformative the fact that  
01:36  
it's not one person who's thinking about  
01:38  
their bank account I'm really excited to  
01:41  
be partnering with cross-match to bring  
01:43  
a listening room to Traverse City and to  
01:45  
have the small intimate venue that we've

01:48  
been longing for we've really thought  
01:50  
about common grounds as a space where we  
01:53  
can bring in different sectors of the  
01:54  
community you know folks that are  
01:56  
focused on family and the arts and food  
01:59  
and farm systems  
02:00  
and health and well-being and how can we  
02:02  
help connect all of those sectors to  
02:04  
each other and part of what this project  
02:06  
is doing through brownfield money is  
02:08  
providing money to the city to be able  
02:10  
to redevelop eighth Street that in  
02:12  
itself I think will be huge for the  
02:14  
community to see that 8th Street can be  
02:17  
something different than just what you  
02:20  
drive through when you invest your money  
02:22  
in common grounds you earn not only a  
02:25  
financial return but a quality of life  
02:27  
return for you your family your River  
02:30  
and your community these spaces are so  
02:33  
important because we're social beings it  
02:36  
goes to the heart of what community

02:38  
actually is to commune to sit at the  
02:39  
table and eat together to communicate  
02:42  
and talk to each other exchange ideas  
02:43  
and information it's a real physical  
02:46  
manifestation of the work that we've  
02:48  
been doing for the past 14 years this  
02:51  
will be a place where connection happens  
02:53  
to experience the culture of northern  
02:57  
Michigan place for collaboration to see  
02:59  
excellent art to listen and to be heard  
03:03  
where everyone in the community can feel  
03:05  
a sense of ownership where magic happens  
03:07  
this project is this amazing group of  
03:11  
passionate people all coming together  
03:12  
and pouring their hearts into this new  
03:15  
place and so it's an offering to the  
03:17  
community and it's kind of a time now  
03:20  
where we're asking the community do you  
03:23  
want this and we're hoping that you say  
03:26  
yes  
03:26

**Attachment 7:** `commgrounds2_page.pdf`

1/18/23, 6:04 PM

Invest in Commongrounds Cooperative | Real Estate in Traverse City, MI

Commongrounds Cooperative is not accepting investment.

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Women-led Family-friendly
Commongrounds Cooperative

Real Estate

414 E. 8th Street
Traverse City, MI 49684
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Commongrounds Cooperative previously received $430,600 of investment through Mainvest.
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THE PITCH

Commongrounds Cooperative is seeking investment to build a community-owned mixed use cooperative real estate project co-locating workforce housing with multi-modal transport and businesses focused on food, family, arts, and wellness.

Generating Revenue First Location Lease Secured

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OUR MISSION

Commongrounds is a real estate cooperative in Traverse City, with a goal to develop real estate that meets community needs and increases quality of life in the region.

Commongrounds has two classes of ownership: our commercial real estate tenant-owners (businesses and nonprofits), and members of our community. All investors must purchase a $50 lifetime (non-refundable) share to become a community owner in Commongrounds. This allows you to be an owner of the cooperative and have the opportunity to invest in the project and receive regular updates. You may also choose to pay an annual membership fee to be an active member who can participate in governance and membership benefits. To purchase a $50 ownership share, please go to www.commongrounds.coop/join.

More than a building project, Commongrounds will be a backbone support for space and activities integrating wellness, arts, family, and food to help people and organizations be healthy, connected, creative, and inclusive. Together, we will provide shared value and triple bottom line returns on investment to tenants, partner organizations, and people working, living, learning, and playing in the region.

This is a preview. It will become public when you start accepting investment.

THE NEST IS YET TO COME 2023 CAMPAIGN

This is a preview. It will become public when you start accepting investment.

THE BUILDING

Our pilot project is 414 E. Eighth Street, a 4-story mixed-use building opening to the public in early 2023.

Located on the Boardman/Ottoway River and in the heart of the North Boardman Lake District in downtown Traverse City, Michigan -- the building offers stunning views of the river and easy access to nearby trails and multi-modal transportation.

The building is designed to meet community needs, offering workforce housing co-located with expanded locations for local nonprofit and business organizations focused on food, family, arts, and wellness.

Its development adds timely momentum to the redevelopment of 8th Street as a vibrant bike-and pedestrian-friendly neighborhood corridor.

The green design uses low impact design principles and features a green roof, energy and water efficient construction, low-emitting materials, and stormwater managed onsite.

This is a preview. It will become public when you start accepting investment.

INSIDE THE SPACE

Inside 414 E. Eighth Street you will find integrated community spaces, featuring tenant partners focused on food, family arts, and wellness--and workforce housing rental units.

The first floor is home to an early childhood education center along with a restaurant and cafe that mentors food entrepreneurs, lowering barriers to success and integrating them with the local food network.

The second floor contains a 150-seat performing arts and event venue, a teaching kitchen, and coworking and meeting space for nonprofits and small businesses.

The third and fourth floors provide workforce housing, which are a mix of studio and 1- and 2-bedroom apartments. Rents vary based on income and are set to be affordable for people earning 60% of area median income up to market rate units.

This is a preview. It will become public when you start accepting investment.

USE OF FUNDS: MAKING THIS HOUSE A HOME!

In Phase I and Phase II of our financing, we raised the money we needed to build a building--but your investment in Phase III will help us launch the project and open its doors, making the building even better and ensuring long-term sustainability for this place our community can all call home.

Final hard construction costs, such as: solar infrastructure, teaching kitchen completion, and a marquee; community amenities focused on food, families, arts, and wellness; and other build-out items to improve common areas and support our tenant-owners

Operating capital, such as: additional staffing for next 16 months, design, food/arts/family incubation, licensing, technology, communications, financing costs, reserve

Replacement of other financing with community investment

This is a preview. It will become public when you start accepting investment.

PRESS

Traverse City Real Estate Co-Op Breaks Several Different Molds

Cooperative or community-owned commercial real estate projects have popped up over the past few years in Oakland, Portland, New Orleans, Chicago, Atlanta. And now Traverse City - thanks to a loan guarantee from the USDA.

Commongrounds lands $1.5M grant

The Commongrounds Cooperative, a mixed-use development at 414 E. Eighth St., has received a $1.5 million grant from the Michigan Community Revitalization Program.

Commongrounds, More Workforce Housing Projects On The Docket

Construction is slated to break ground soon on the four-story, mixed-use Commongrounds Cooperative building at the corner of Eighth Street and Boardman Avenue, with the project anticipated to be complete by late 2021 or early 2022. The development is one of several planned to come online soon in Traverse City that will bring more workforce ...

Impact100 TC Awards Three $100K Grants To Local Nonprofits

https://mainvest.com/b/commongrounds-cooperative-traverse-city#data

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1/18/23, 6:04 PM

Invest in Commongrounds Cooperative | Real Estate in Traverse City, MI

Impact100 Traverse City distributed $110,000 transformational grants to three local nonprofit Tuesday. The 2021 recipients of Impact100 grants include: Crosshatch Center for Art and Ecology, with co-applicant Commongrounds Cooperative. The grant will go towards the Commongrounds + Crosshatch Performance Venue, a 150-seat performance venue to be housed within the community-owned Commongrounds building under construction ...

Commongrounds in Traverse City Hosts Virtual Groundbreaking

Construction starts soon on the 4-story, mixed-use real estate cooperative.

Teaching Kitchens Taking Hold in Traverse City

Groundwork Center for Resiliency is moving to the Commongrounds workshare development on Eighth Street - and it's bringing lunch with it. A new teaching kitchen run by the non-profit will provide opportunities for people to directly learn about and experience the benefits of healthy food and cooking.

Commongrounds Cooperative Puts Community First in Traverse City

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THE TEAM

Leslie Donaldson

Chief Executive Officer

Leslie joined Commongrounds in June 2022 with decades of experience leading complex initiatives in community engagement, educational programming, and creative placemaking. Prior to Commongrounds, Leslie served as an Assistant Teaching Professor at Carnegie Mellon University, held two different senior leadership roles at Interlochen Center for the Arts, and designed and lead a range of festivals, programs, and community endeavors in Lansing, Michigan, including a collaboration with governmental partners and Michigan State University on a regional cultural economic development initiative. Leslie holds her Master of Fine Arts from Rhode Island School of Design and a Bachelor of Fine Arts from Michigan State University. She is a proud graduate of Traverse City Central High School and has been a lifelong advocate for Northern Michigan.

Kate Redman

Project Director

Kate Redman is a community enterprise attorney and the co-founder and project director of Commongrounds, a real estate cooperative in Traverse City, Michigan. Commongrounds develops real estate that is owned by its tenants and community and is designed to meet community needs and increase the quality of life in northern Michigan. Kate also founded Commonplace, a nonprofit coworking and community hub in Traverse City.

Andrew Lutes

Chief Operations Officer

Andrew's background spans from hospitality management and purpose-driven business operations, to music performance and early childhood tutoring. Most recently, he came to the project in October of 2020 after working as the General Manager of Workshop Brewing since 2016.

Joy Martin Omer

Director of Stakeholder Engagement and Events

A "professional people person" with over a decade of sales and marketing experience, Joy takes pride in connecting communities through mission-driven business and local food systems. Raised in Ann Arbor, Michigan she established a career in artisan retail at Zingerman's Delicatessen, and joins Commongrounds after three years as Marketing Manager and Assistant General Manager at Common Good Bakery in Traverse City, Michigan. Joy also runs Saltless Sea Creamery alongside husband/cheesemaker, Dave, and can often be found trying to keep up with her two young sons (Sam, 2 and Milo, 9 months) while wondering where she left her last cup of coffee.

Joey DiFranco

Creative Director

With over 15+ years as a creative and media strategist, Joey has driven growth and creative innovation for a variety of global brands including Nike, Google, Allstate, Fuji and more. An entrepreneur and media futurist, Joey seeks out unique strategies and opportunities for both investment and development, often on a non-traditional path.

Jessica Kooiman Parker

Visual Arts Curator and Designer

Jessica is an independent curator, art advisor, and designer developing the contemporary visual art program at Commongrounds. In her previous work, Jessica served as the Executive Director and Curator of the Firehouse Art Center in Longmont, CO, where she increased the budget and attendance while fulfilling the mission of providing life enhancing experiences through art. After becoming a mother, Jessica transitioned to independent curation, working with Redline Contemporary Art Center in Denver and Artworks Loveland before becoming the Visual Arts Curator of the Dairy Arts Center in Boulder, CO. Jessica holds her Bachelor of Fine Arts from the University of Wisconsin-Stout.

Ray Kendra

Architect

Ray Kendra is the architect of Commongrounds and founder/principal at Environment Architects, an architectural firm focused designing buildings that contribute to the environments that surround us. The firm looks at the circumstances, objects and conditions that are all around and create spaces that are functional, well-thought and beautiful. His experience includes residential and multi-use buildings similar in scope and size as Commongrounds.

Cunningham-Limp Construction

Construction Management

Cunningham-Limp is the construction management firm construction the building. They are a diversified real estate firm that specializes in development, design, and construction. They lead with a team of real estate experts, financial advisors, architects, engineers, and construction professionals. We deliver solutions by integrating with an ownership team and actively managing projects from concept through completion, assuming 100% responsibility for all phases of each project.

Sam Bennett

Project Manager

After receiving his Business Management and Marketing Degree from Loyola Marymount University, Sam started his career developing and executing grassroots marketing strategies for Red Bull Energy Drink, and then went on to lead global lifestyle marketing and entertainment projects for GoPro Inc. Today, Sam is a consultant with SwellMinded, an impact consultancy where he works as a strategist, project manager, and content producer focused on helping purpose-driven organizations better communicate the good that they are doing for their communities and our environment. Sam works closely with Commongrounds Cooperative through his role at SwellMinded.

Elise Crafts

Communications Manager

Elise is a consultant via her firm Statecraft, a community development consultancy founded in 2018 to help communities and organizations make their visions a reality. Elise combines her experience with community engagement, planning, development, and implementation to facilitate processes that are community-informed, action-oriented, partnership-driven, and tailored. In addition to her expertise in community development, Elise also offers communications services, including content development and project management to help project leaders fulfill their visions.

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Updates

AUGUST 1ST, 2022

Last Day to Invest in Commongrounds! (& Thank You)

Hello from Commongrounds! Today is the last day to invest in our building currently under construction at 414 E. 8th Street in Traverse City. Our public-facing campaign closed at the end of 2021, but we kept our investment open because we kept receiving funding from additional investors. We appreciate the incredible show of support we've received and welcome any final hour joiners!

https://mainvest.com/b/commongrounds-cooperative-traverse-city#data

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As a quick update, construction is on track to complete this fall. We expect our first residents to move in by October, and our commercial tenants to open in November. We'll invite all our owners and investors to a grand opening party in early 2023. We hope to see you there! We continue to raise funds to round out our capital campaign to support some additional physical improvements to the building, repay some bridge loans, and provide some additional staffing reserve money to ensure we hit the ground running after building opening.

For current investors, if you have not been receiving updates, please recall that every investor must also purchase an equity share as a community owner in Commongrounds for $50. All community owners receive regular email newsletters and updates. You can also watch the livestream of construction progress at www.commongrounds.coop, or wander over to our facebook page at https://www.facebook.com/commongroundscoop/ to see a facebook live tour of the construction progress on the residential units from this weekend.

Thanks, everybody! We are so grateful to all the investors like you that have made the project possible.

With gratitude,

the Commongrounds Team

PS - Here are some recent construction photos! Enjoy.

Aerial view of construction from 8th Street, April 2022

Aerial view of construction from the river side, April 2022

Views from the residential units.

Installed kitchen in a residential unit.

Views of commercial areas under construction (April 2022)

DECEMBER 27TH, 2021

This is our year.

2021 was a wonderful year for Commongrounds, thanks to you.

A year ago, we were just breaking ground on 8th Street. Today, the structure of our building stands tall. During the time in between 200 investors invested more than $350,000 in Commongrounds, and we added more than 100 new Commongrounds owners to our flock. The best news is, 2022 is set to be even better. Our building will open this year, and we will have the opportunity to come together in a whole new way!

Thank you all so much for your involvement in Commongrounds. We appreciate those of you who have invested, and for those of you who are still in the process of completing your investment, the round will remain open until the end of January.

To our newest investors-- pursuant to the requirements of our certificate, please sign up to become a member of the co-op before the investment window closes, so that your investment can be valid and in compliance with our bylaws.

We will talk to you in 2022!

From all of us here at Commongrounds Cooperative,

Happy holidays and happy new year!

DECEMBER 6TH, 2021

SUCCESS!

As our public campaign closes, we are filled with gratitude and excitement that 183 amazing owners, friends, community members, and far-off admirers, have chosen to make this place we love better, together-- through community-owned development!

Our median investment for this campaign was $1,806 and total investment through today is $330,500, accounting for 66% of our stretch goal and 330% of our minimum goal-- PLUS we nearly DOUBLED our cumulative campaign goal of 100 investors!

While our public-facing campaign ended on December 3rd-- the legal investment window will remain open for a little while longer, allowing some folks to complete their investments in the next week or so.

That being said, expect to see another update in the coming weeks as our campaign details finish coming in-- including information on how and when investors can begin redeeming their perks!

From all of us here at Commongrounds Cooperative, thank you!

We can't wait to see you at 414 E. Eighth St!

DECEMBER 2ND, 2021

A day can make all the difference!

In less than 48 hours since our last update, 30 more individuals have invested, tipping us over the 50% mark towards our stretch goal!

With one day left in our public campaign, we are so grateful and honored that you've chosen to make the idea of community-owned development a reality here in northern Michigan.

In celebration, join us tomorrow, Friday Dec. 3rd, at 12:30pm-- LIVE on our Facebook page, for an on-site tour of our beautiful building's progress, and all the wonderful amenities it will have to offer our community.

Click here for more info -- and stay tuned for our campaign results update!

NOVEMBER 30TH, 2021

100+ investors and just a few days left!

With only a few days left in our campaign, we reached our 100 investor goal!

To all those who have invested thus far, thank you!

As you may already know, one of the things that makes Commongrounds Cooperative and our 4-story mixed-use building so unique, is the opportunity for our community members to earn triple-bottom-line returns-- while making big impacts in the areas of food, family, arts, and wellness throughout our region.

Imagine walking in to this beautiful building next year on a sunny, autumn afternoon. Perhaps you're picking up the baby from the early childhood center, or meeting a friend for a cocktail or cup of locally roasted coffee on the riverside deck. Maybe you're grabbing an after-work bite of locally-grown eats, or meeting a resident/friend to catch a concert in the listening room. Or, you could be headed through the bright, open space, and up the monumental stair to utilize your co-working membership or catch a class in the teaching kitchen.

Envision yourself in this building, and then envision your friends, your family, and your neighbors there. Feel that? That's the pride and sense of ownership that is achieved when a community chooses to make the place they love better, together.

We look forward to seeing you at 414 E. 8th St. next year-- to share in that feeling.

https://mainvest.com/b/commongrounds-cooperative-travesse-city#data

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XO

the Commongrounds Team

NOVEMBER 25TH, 2021

Happy Thanksgiving!

Hello, investors! We hope you are enjoying a safe and wonderful holiday. We at Commongrounds are grateful for YOU -- the investors that continue to make our project possible. May your day be filled with love and gratitude.

NOVEMBER 12TH, 2021

Have you seen our new video?

Hello, friends! Happy Friday. A couple of quick updates for you as you head into the weekend:

We recently updated our Mainwest page with a video that helps tell the story of Commongrounds and what we hope this building can achieve for our neighborhood, community, the businesses it houses -- and you, our investors! If you have a moment today, please head to our Mainwest page and check it out!

Construction continues to progress and we look forward to the start of the installation of some of our metal paneling. You can see the crews installing the braces for the panels and insulation in our live feed this morning.

Have a wonderful weekend, all. As always, please feel free to post in the discussion section any questions you have about the project or the investment. We look forward to continuing to build 414 E. 8th Street with you!

Kate

NOVEMBER 3RD, 2021

Commongrounds Featured in Next City

Hello, friends!

We are excited to have been featured yesterday in Next City, a leading national periodical for sharing ideas and trends for building just and equitable communities. They featured our ownership and investment structure as an innovative way to involve communities in the real estate happening in their neighborhoods.

"Cooperative or community-owned commercial real estate projects have popped up over the past few years in Oakland, Portland, New Orleans, Chicago, Atlanta. And now Traverse City -- thanks to a loan guarantee from the USDA."

The article does an excellent job of providing some detail on the project's funding mechanisms and genesis. Please enjoy and let us know if you have questions.

https://nextcity.org/urbanist-news/entry/traverse-city-real-estate-co-op-breaks-several-different-molds

Thanks for your interest and support!

Kate

Project Director, Commongrounds Cooperative

NOVEMBER 1ST, 2021

Construction is Underway!

Hello, Commongrounds friends!

We are pleased to report that construction of our pilot project at 414 E. 8th Street is making excellent progress - and incredibly in today's world, so far it is underbudget and (mostly) on time.

For those of you who are new to Commongrounds, we are a real estate cooperative owned by our community and our future nonprofit and business tenants. Our goal is to empower our community to come together to support building inspiring community spaces that help make our neighborhoods and quality of life better -- while giving people a way to build wealth by investing in their neighborhood.

Our pilot project at 414 E. 8th Street in Traverse City is designed to give momentum to the City's vision of redeveloping 8th street as a compact and walkable health and wellness corridor. We broke ground on our 4-story, mixed use/mixed income building in December 2020 and it is slated for completion by fall 2022.

Construction has continued with great success even during these challenging times thanks to our incredible construction manager, Cunningham Limp (CLC). We have a guaranteed price contract with CLC, so it is very unlikely we will have unexpected construction costs. However, even better than unexpected costs, they have managed our allowances to come in at least $150,000 under budget, so we actually will likely get money back. Despite extreme supply change disruptions and labor shortages, we have only had about a month of delay due to the steel market earlier this spring. At this point, we are through the period with the most uncertainty and Cunningham Limp is optimistic that we will remain on-time and underbudget to complete construction and open by fall 2022. We are grateful for their incredible leadership through this process.

And how about that view from the fourth floor! Can't wait to meet you up there for lunch in 2022!!

Thanks for your interest and support. As always, please feel free to reach out with questions.

Kate Redman

Project Director

kate@commongrounds.coop

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Data Room

Intended Use of Funds

Target Raise

Maximum Raise

Repayment of bridge loans for construction $33,000

Add'l build out costs and community amenities $27,250

Operating capital (additional staffing for next 16 months, design, food/arts/family incubation, licensing, technology, communications, financing costs, reserve $33,000

Mainwest Compensation $6,750

Total $100,000

Financial Forecasts

Year 1 Year 2 Year 3 Year 4 Year 5

Gross Sales $819,356 $1,597,962 $1,627,140 $1,657,073 $1,687,783

EXPENSES

Utilities $8,749 $13,123 $9,191 $9,420 $9,655

Salaries $266,667 $275,000 $283,250 $291,748 $300,500

Insurance $8,399 $8,608 $8,823 $9,043 $9,269

Repairs & Maintenance $11,667 $11,958 $12,256 $12,562 $12,876

Legal & Professional Fees $9,000 $9,225 $9,455 $9,691 $9,933

https://mainwest.com/b/commongrounds-cooperative-traverse-city#data

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Marketing & Member Services $14,175 $18,900 $14,892 $15,264 $15,645

Property Taxes $127,000 $160,929 $133,429 $136,764 $140,183

General/Admin $22,792 $18,500 $23,945 $24,543 $25,156

Security Expenses $4,667 $8,000 $8,240 $8,487 $8,742

Landscaping & Snow Removal $4,375 $7,500 $7,725 $7,967 $8,195

Commongrounds LLC Owner Preferred Return $10,313 $10,313 $10,313 $10,313 $10,313

Operating Profit $331,552 $1,055,906 $1,105,621 $1,121,281 $1,137,316

This information is provided by Commongrounds Cooperative. Mainvest never predicts or projects performance, and has not reviewed or audited this financial forecast. Please see below for additional risk disclosures.

Documents

Offering Memorandum

Investor Agreement

2020 Balance Sheet

2020 Income Statement

2021 Balance Sheet

2021 Income Statement

Commongrounds FY21 Financial Statements and Audit.pdf

Investment Round Status

Target Raise $100,000

Maximum Raise $1,000,000

Amount Invested $0

Investors 0

Investment Round Ends December 7th, 2022

Summary of Terms

Legal Business Name Commongrounds Cooperative

Minimum Investment Amount $250

Description of Securities

All investors must join as an owner of the Cooperative (www.commongrounds.coop/join). The Investment Certificates provide owner-investors with an opportunity to earn an equity-like dividend return, beginning the year after building completion, which will be disbursed annually from there forward until the investor withdraws and is repaid their original investment amount. The rate of return issued to each investor will be dependent on whether they select the regular return rate or our social impact return option. The regular rate will be 6% annually on the amount invested, while the social impact rate will be 3% annually, with an additional 3% being directed by the cooperative board to areas of social impact in the community and the building. The investor will annually have the option to choose to withdraw their capital after Year 5, contingent upon the Cooperative obtaining replacement capital. Investors will also receive perks as outlined below. Details are available in the investor agreement.

Financial Condition

Commongrounds Cooperative (the "Company") is organized as a Michigan non-profit corporation which operates for the purposes of community and real estate development and transforming real estate development by providing inclusive opportunity for community and tenant members to own and engage with all stages of a development, including planning, financing, ownership, and management; to design facilities for their benefit, use, and occupancy; and purposes and activities incidental and related to the foregoing purposes.

Please see our 2021 audit for detailed information on our financials as of December 31, 2021. We are still finalizing review of our 2022 financial statements (as of January 17, 2023), but here is a good faith summary as of December 31, 2022.

As of December 31, 2020 the Company had assets of $11,982,136.5B, which was comprised primarily of property, including construction in progress ($10,429,248), capitalized soft costs ($485,631), as well as a deferred tax asset of $85,913, and other assets of cash, investment, and interests reserves held by our lenders (together totaling $930,926 with $40,416 in cash and $310,356 in cash interest reserves).

Commongrounds Cooperative is the majority (60%) owner of Commongrounds, LLC, which has leased the land at 414 E. 8th Street to Commongrounds Cooperative for 99 years for construction of a building. Commongrounds LLC is co-owned by investors (none of whom own more than 10%), who collectively invested $550,000 into the land purchase. Commongrounds Cooperative is planning to purchase the LLC co-ownership interests no later than 2028.

The company has had no major cash events since the 2022 financial sheets other than regular monthly operational expenses. The company did experience the following major cash event in 2021-22:

Received a $1.5mm grant from the Michigan Strategic Fund in February 2021 for the construction of a new commercial and residential development.

Entered into an agreement with a bank on February 26, 2021, for a construction loan not to exceed $8mm. This loan is collateralized by all assets of the cooperative. Almost $8mm has been drawn as of December 31, 2022 in order to complete construction on the building.

Entered into an agreement on February 26, 2021 with HASI OBS OP A LLC for a loan in the amount of $1,850,000. This loan is collateralized by real estate and is a PACE Special Assessment that stays with the property rather than the cooperative.

Entered into an agreement on February 26, 2021 with IFF, which is a non-profit Community Development Financial Institution (CDFI), for a loan of up to $1,500,000. This loan is collateralized by real estate. About $1m has been drawn as of December 31, 2022 in order to complete construction on the building.

Received approximately $660,000 for the issuance of Class T-1 certificates for community owner investors supporting specific commercial tenant-owners. These investors will earn a preferred dividend for their investment and be repaid by the tenant-owners.

Received approximately $430,000 in a Mainvest investment crowdfunding campaign as Community Owner investment certificates.

Received bridge loans totally $375,000 from community owners while we pursue and increase in loan funds from IFF (anticipated by March 2023).

Received a temporary certificate of occupancy for the entire building excepting commercial tenants who are not yet operational but are planning to be by spring 2023.

As of December 31, 2022, the Company just started generating revenue through rental of residential units and it rented at 85% of capacity. The commercial portions of the building are fully leased to our commercial tenant-owners but are not yet fully operational and open to the public. Commongrounds expects to start earning revenue from commercial tenants and from community membership events and rentals in Q1 of 2023. Accordingly, there are limited financial statements and information for investors to review. When evaluating this investment opportunity, investors should consider factors outlined in the risk section as well.

In terms of expenses, in 2022 the Company had total expenses of approximately $1,236,365, which included: construction loan interest payments ($310,356), taxes ($102,854), and various operations, staff, and contractor fees related to construction and operations.

Financial liquidity

Commongrounds Cooperative has a low liquidity position due to its low cash reserves as compared to debt and other liabilities. Commongrounds Cooperative expects its liquidity position to grow as it generates revenue this year and also decline upon raising capital on Mainvest and deploying the capital to grow the business.

Risk Factors

You Might Lose Your Money

When you buy a certificate of deposit from a bank, the Federal government (through the FDIC) guarantees you will get your money back. Buying a Note is not like that at all. The ability of Commongrounds Cooperative to make the payments you expect, and ultimately to give you your money back, depends on a number of factors, including many beyond our control.

Limited Services

Commongrounds Cooperative operates with a very limited scope, offering only particular services to potential clients, making them vulnerable to changes in customer preferences.

Lack of Accounting Controls

Larger companies typically have in place strict accounting controls. Smaller companies typically lack these controls, exposing themselves to additional risk.

https://mainvest.com/b/commongrounds-cooperative-traverse-city#data

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Competition

The market in which we operate is highly competitive and could become increasingly competitive with new entrants in the market. Commongrounds Cooperative competes with many other businesses, both large and small, on the basis of quality, price, location, and customer experience. Changes in customer preference away from Commongrounds Cooperative's core business or the inability to compete successfully against the with other competitors could negatively affect Commongrounds Cooperative's financial performance.

Reliance on Management

As a securities holder, you will not be able to participate in Commongrounds Cooperative's management or vote on and/or influence any managerial decisions regarding Commongrounds Cooperative. Furthermore, if the founders or other key personnel of Commongrounds Cooperative were to leave Commongrounds Cooperative or become unable to work, Commongrounds Cooperative (and your investment) could suffer substantially.

Financial Forecasts Risks

The financial forecasts provided by us herein are reasonable forecasts by us based upon assumption of stable economic conditions and other various assumptions regarding operations. The validity and accuracy of these assumptions will depend in large part on future events over which Commongrounds Cooperative and the key persons will have no control. Changes in assumptions or their underlying facts could significantly affect the forecasts. To the extent that the assumed events do not occur, the outcome may vary significantly from the projected outcomes. Consequently, there can be no assurance that the actual operating results will correspond to the forecasts provided herein. Additionally, Commongrounds Cooperative is a newly established entity and therefore has no operating history from which forecasts could be projected with.

Inability to Sell Your Investment

The law prohibits you from selling your securities (except in certain very limited circumstances) for 12 months after you acquire them. Even after that one-year period, a host of Federal and State securities laws may limit or restrict your ability to sell your securities. Even if you are permitted to sell, you will likely have difficulty finding a buyer because there will be no established market. Given these factors, you should be prepared to hold your investment for its full term.

The Company Might Need More Capital

Commongrounds Cooperative might need to raise more capital in the future to fund/expand operations, buy property and equipment, hire new team members, market its services, pay overhead and general administrative expenses, or a variety of other reasons. There is no assurance that additional capital will be available when needed, or that it will be available on terms that are not adverse to your interests as an investor. If Commongrounds Cooperative is unable to obtain additional funding when needed, it could be forced to delay its business plan or even cease operations altogether.

Changes in Economic Conditions Could Hurt Commongrounds Cooperative

Factors like global or national economic recessions, changes in interest rates, changes in credit markets, changes in capital market conditions, declining employment, changes in real estate values, changes in tax policy, changes in political conditions, and wars and other crises, among other factors are unpredictable and could negatively affect Commongrounds Cooperative's financial performance or ability to continue to operate. In the event Commongrounds Cooperative ceases operations due to the foregoing factors, it can not guarantee that it will be able to resume operations or generate revenue in the future.

No Registration Under Securities Laws

The Notes will not be registered with the SEC or the securities regulator of any State. Hence, neither Commongrounds Cooperative nor the Notes will be subject to the same degree of regulation and scrutiny as if they were registered.

Incomplete Offering Information

Title III does not require us to provide you with all the information that would be required in some other kinds of securities offerings, such as a public offering of shares (for example, publicly-traded firms must generally provide investors with quarterly and annual financial statements that have been audited by an independent accounting firm). Although Title III does require extensive information, it is possible that you would make a different decision if you had more information.

Lack of Ongoing Information

Commongrounds Cooperative will be required to provide some information to investors for at least 12 months following the offering. However, this information is far more limited than the information that would be required of a publicly-reporting company; and Commongrounds Cooperative is allowed to stop providing annual information in certain circumstances.

Uninsured Losses

Although Commongrounds Cooperative will carry some insurance, Commongrounds Cooperative may not carry enough insurance to protect against all risks to the business. Additionally, there are some kinds of risks that are very difficult or impossible to insure against, at least at a reasonable cost. Therefore, Commongrounds Cooperative could incur an uninsured loss that could damage its business.

Changes in Laws

Changes in laws or regulations, including but not limited to zoning laws, environmental laws, tax laws, consumer protection laws, securities laws, antitrust laws, and health care laws, could negatively affect Commongrounds Cooperative's financial performance or ability to continue to operate. Specifically, any additional regulation on the industry could significantly negatively affect the business.

Conflict of Interest With Companies and Their Management

In many ways, your interests and the interests of Commongrounds Cooperative's management will coincide: you both want Commongrounds Cooperative to be as successful as possible. However, your interests might be in conflict in other important areas, including these. You might want Commongrounds Cooperative to act conservatively to make sure they are best equipped to repay the Note obligations, while Commongrounds Cooperative might prefer to spend aggressively to invest in the business. You would like to keep the compensation of managers low, while managers want to make as much as they can.

Future Investors Might Have Superior Rights

If Commongrounds Cooperative needs more capital in the future and takes on additional debt or other sources of financing, the new investors might have rights superior to yours. For example, they might have the right to be paid before you are, to receive larger distributions, to have a greater voice in management, or otherwise.

The Company is Not Subject to the Corporate Governance Requirements of the National Securities Exchanges

Any company whose securities are listed on a national stock exchange (for example, the New York Stock Exchange) is subject to a number of rules about corporate governance that are intended to protect investors. For example, the major U.S. stock exchanges require listed companies to have an audit committee made up entirely of independent members of the board of directors (i.e., directors with no material outside relationships with Commongrounds Cooperative or management), which is responsible for monitoring Commongrounds Cooperative's compliance with the law. Commongrounds Cooperative will not be required to implement these and other investor protections.

You Have a Limited Upside

Notes include a maximum amount you can receive. You cannot receive more than that even if Commongrounds Cooperative is significantly more successful than your initial expectations.

You Do Have a Downside

Conversely, if Commongrounds Cooperative fails to generate enough revenue, you could lose some or all of your money.

Payments and Return Are Unpredictable

Because your payments are based on the revenue of Commongrounds Cooperative, and the revenue of Commongrounds Cooperative can go up or down (or even disappear altogether) unpredictably, it is impossible to predict how much you will receive and when. And because the payments are unpredictable, so is your ultimate return.

https://easinvest.com/b/commongrounds-cooperative-traverse-city#data

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The Notes Are Unsecured and Uninsured

The Notes are not secured by any collateral, nor are they guaranteed or insured by the FDIC or any other entity.

Subordination

The Notes shall be subordinated to all indebtedness of Commongrounds Cooperative to banks, commercial finance lenders, leasing and equipment financing institutions, and/or other institutions regularly engaged in the business of lending money.

Lack of Guaranty

The Notes are not personally guaranteed by any of the founders or any other person.

Limitation of Individual Rights in Event of Default

In the event of a default under the Notes, you will not be able to enforce your rights individually (for example, by bringing a lawsuit). Instead, a representative will be appointed according to the procedures set forth in the Note Indenture. It's possible that you will not like the representative, or that the representative will do things you believe are wrong or misguided. If an event of default has occurred and a representative has been appointed, all of the representative's reasonable expenses must be paid before any further payments are made with respect to the Notes.

COVID-19 Impact

The ongoing COVID-19 pandemic may impact the Company's ability to generate revenue and/or continue operations. If operations are ceased due to COVID-19 restrictions, the Company can not guarantee that it will resume operations in the future.

Limited Operating History

Commongrounds Cooperative is a newly established entity and has no history for prospective investors to consider.

This information is provided by Commongrounds Cooperative. Mainvest never predicts or projects performance, and has not reviewed or audited this information. For additional information, review the official Form C filing with the Securities and Exchange Commission on the EDGAR website.

This is a preview. It will become public when you start accepting investment.

Investor Discussion

This discussion is exclusively available to the business owners and investors.

I'd love for this business to...

My favorite part about this is...

Please tell me more about...

Sean S. Portland, OR 2 days ago

Hello -- will you be mailing out the 2022 interest payments soon? (I understand it will be prorated based on the COO timing.)

Reply

Kate R. Traverse City, MI 2 days ago Commongrounds Cooperative Entrepreneur

Thanks for checking in! We'll be sending an update later this month for when payments will start. Happy 2023 ;)

Reply

Joel J. Lafayette, LA 22 days ago

Let's say I invested $100 via Mainvest. Why does the $100 not count towards the $50 required for my share?

Reply

Kate R. Traverse City, MI 21 days ago Commongrounds Cooperative Entrepreneur

Hi, Joel - the $50 goes toward the purchase of a lifetime share, so it is essentially non-refundable. Your investment will be paid back according to the loan terms. I know the ownership share is different from other Mainvest options, but it is part of our structure as a cooperative to give our investors the right to an ongoing role in governance and ownership of the cooperative as well as investment. Thanks for your interest!

Reply

Kate R. Traverse City, MI 6 months ago Commongrounds Cooperative Entrepreneur

Thank you to everyone who invested in Commongrounds! We will be in touch this month with updates and next steps. Please disregard the message you received from Mainvest late last night describing your terms; it does not accurately describe our project. Our structure for providing returns is a little different than their usual business, so the automated email did not capture that. As you signed up for when you became an investor, you will receive a 6% preferred return starting when we have a certificate of occupancy for the building (projected by end of 2022), pro-rated in the first year based on when we are actually open. Thanks for your support!

Reply

Kate R. Traverse City, MI 6 months ago Commongrounds Cooperative Entrepreneur

Hello, all - to answer a common question: there is a $50 one-time fee to purchase a community owner equity share in Commongrounds that is required for all investors. Like other cooperatives, this share purchase allows the shareholder to be an owner and shareholder with certain rights, as described in the bylaws. You hold that share for the life of the cooperative, and it does not earn a return. You do not have to pay additional annual fees unless you want to participate in governance or other activities in the building for which there are fees. If you just want to hold your investment and earn a return, you will be paid your investment return without any additional fees required. You can read more about the Commongrounds ownership and governance structure at our website, www.commongrounds.coop/join. Just let us know if you have any questions!

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Joel J. Lafayette, LA 22 days ago

I don't understand. Let's say I invested $100 via mainvest. Why does the $100 not count towards the $50?

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Harrison G. Kalama, WA 6 months ago

I'd love for this business to further explain the member fee for the many who keep bringing it up. Do you have to pay it (and will investment be refunded if not), is it an annual fee, and overall what is it. There are a lot of words on the website but a simpler explanation looks like it would be beneficial in this discussion thread. Thanks!

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Kate R. Traverse City, MI 6 months ago Commongrounds Cooperative Entrepreneur

Hi, Harrison! Thanks for your interest. We've answered the question in a few replies below, but I'll add a general discussion note as well - good suggestion!

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Paul L. Chicago, IL 6 months ago

Is there an update on the progress of the building? It looks like the building was scheduled to be completed in Summer of 2022, but I don't see any updates on the progress, here or on the website. I am looking forward to attending the tour and opening party as a Toucan Investor, but I'm hopeful to get a more frequent update on the progress. If I am missing something where more updates are being posted, could you please let me know?

https://mainvest.com/b/commongrounds-cooperative-traverse-city#data

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Kate R. Traverse City, MI 6 months ago Commongrounds Cooperative Entrepreneur

Hi, Paul ! Thanks so much for your investment and support. We just posted an update. All investors are required to purchase an equity share in Commongrounds for $50; once you have purchased the share, you will receive regular email updates on the project as a community owner. Visit www.commongrounds.coop/join to sign up. Thanks so much for your interest.

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Joel J. Lafayette, LA 3 months ago

Didn't we already buy shares by purchasing them through Mainvest? Are you saying we have to purchase an extra $50 share just get updates? There's no other way to get updates about this project we already invested in?

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Patrick P. Provincetown, MA 6 months ago

I don't understand having to purchase membership when I have already paid Mainvest. Does this mean I have to pay twice ? Is the return calculated on the total investment ?

Kate R. Traverse City, MI 6 months ago Commongrounds Cooperative Entrepreneur

Hi Patrick - Thanks for your questions. The $50 is to purchase a share of our cooperative as a community owner. You hold that share for the life of the cooperative, and it does not earn a return. It is just the foundation of organization and you will have access to governance rights and other information as a community owner of the cooperative. You can reach more about at it our website, www.commongrounds.coop/join

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John M. Quinton, VA 7 months ago

Good luck

PV M. 7 months ago

Hello, I love the concept. Can people outside of USA invest in this?

MARILOU P. Nashville, TN 8 months ago

Ultimately, we're all looking for common grounds.

Peter G. Miami, FL 9 months ago

I supported this to help out the mission

Lori M. Partlow, VA 9 months ago

I saw a question about the "investors must become members", but it wasn't ever answered on the discussion. I am "invested" for $100, do I lose that if I don't become a "member" as well?

Kate R. Traverse City, MI 9 months ago Commongrounds Cooperative Entrepreneur

Hi, Lori! Thanks for your interest. And you are correct, all investors must be community owners of the project and purchase a $50 equity share in the building. You can sign up at www.commongrounds.coop/join. Just let us know if you have any other questions.

Drew W. Eugene, OR 8 months ago

Is this a yearly $50 or a One Time?

Doug M. Alachua, FL 7 months ago

Katherine - I wasn't aware that I needed to sign up or pay more outside of Mainvest, can you explain more? I invested $500 in Jan 2022 and haven't received any repayments. Are we paying $50 on top of our current investment?

Kate R. Traverse City, MI 6 months ago Commongrounds Cooperative Entrepreneur

Hi, Doug - The $50 is one-time share purchase. It is to purchase a share of our cooperative as a community owner. You hold that share for the life of the cooperative, and it does not earn a return. It is just the foundation of organization and you will have access to governance rights and other information as a community owner of the cooperative. You can reach more about at it our website, www.commongrounds.coop/join. It is $50 on top of your current investment.

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Doug M. Alachua, FL 6 months ago

So if we do not pay the additional $50 we will not receive a return on investment? I wish this was stated more clearly when we all bought in.

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Lisabeth H. Georgetown, TX 9 months ago

I invested because I believe in this project

Hilena B. Malden, MA 10 months ago

I supported this because this make sense to me I, and I can foresee the growth of it in 5 years.

Luke E. San Diego, CA 10 months ago

Did you end up having to pay to be a Commongrounds member in addition to your investment here?

Hilena B. Malden, MA 10 months ago

Hi Luke, I did pay the $50 fees. I don't want to leave anything on the table and it made sense to me. So I made you I'm all in, I did everything they say, and all I have to do is to wait and see🤔💡

Hilena B. Malden, MA 10 months ago

I made sure I'm all in**

Doug M. Alachua, FL 6 months ago

Hilena - I invested back in Jan 2022 and haven't received any repayments. Do I also have to pay to become a member? I don't recall seeing this when I made my initial investment

Hilena B. Malden, MA 6 months ago

https://mainvest.com/b/commongrounds-cooperative-traverse-city#data

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Hi Doug, becoming a member it's optional. I carefully went through everything before investing, and while going through them, there was an option to become a member, and I took advantage of that opportunity. And Return on investment doesn't happen right away or the same year. From my experiences, I always notice I start receiving returns on all my investments the year after my investment.

Doug M. Alachua, FL 6 months ago

Thanks for the info! Can you tell me what benefits come from becoming a member?

Hilena B. Malden, MA 6 months ago

Here's the contact below for more information Email info@mainvest.com Phone (978) 414-5989

WCraig J. Rensselaer, IN 10 months ago

What is the exit procedure out of this investment?

Denaz S. Little Rock, AR 9 months ago

Ask for a refund.

Kate R. Traverse City, MI 9 months ago Commongrounds Cooperative Entrepreneur

Hi, Craig. After the minimum investment period, there will be an annual opportunity to withdraw investment. We will ask investors to notify us by a certain date and then pay by the end of that year, provided the cooperative can afford the withdrawals..

Christopher D. Marion, OH 11 months ago

I invested because I think this is a great way to re-develop real estate based on community, not pure speculation.

Carmen L. Altamonte Springs, FL 11 months ago

Please clarify for if I already invested do I also have to sign up as a member for my investment to be valid?

Denaz S. Little Rock, AR 11 months ago

I also would like to know...

Luke E. San Diego, CA 10 months ago

As would I. From their website, it seems like it says we must sign up and pay to be a member in order to invest, but mainvest has no information on this. I'm not sure what my investment is doing at this point. Sitting idle?

Michael A. Burke, VA 11 months ago

I received this email. Is it real? "Thank you for being an investor in Commongrounds Cooperative and supporting main street businesses! We are contacting you to let you know that Commongrounds Cooperative is extending its offering and date to April 1st, 2022. We are required by law to receive a confirmation that you would like to remain an investor of Commongrounds Cooperative. PLEASE REPLY TO THIS EMAIL TO CONFIRM YOUR INVESTMENT. IF YOU DO NOT CONFIRM YOUR INVESTMENT WITHIN THE NEXT FIVE BUSINESS DAYS YOUR INVESTMENT WILL BE CANCELLED AND YOUR FUNDS RETURNED TO YOU. You can find more information by visiting the listing on mainvest.com."

Kate R. Traverse City, MI 11 months ago Commongrounds Cooperative Entrepreneur

Yes, that is a real email from Mainvest! Thanks for checking. Since we extended the deadline of our campaign. You shouldn't have to verify any additional info other than just replying if you would like to keep your investment. If you have any further questions, you can reply directly to the email you received or reach out to support@mainvest.com.

David B. Williamsburg, MI 12 months ago

I invested because I want to support new growth in my local community

Aron R. Pinole, CA 12 months ago

On reading Ray Kendra's description of the project, in a blog post on the cooperative's website, it was striking that it's implied that the building won't offer long-term onsite parking, free or paid, for tenants. Is that accurate? (The prospective Board Member packet mentions the property will have 16 underground parking spots, plus three above ground, all of which will be public and metered.) Beyond the bus stop, biking, walking, etc., are there any nearby parking lots which provide tenants who might have cars some place to park them, full-time, for free or at a reasonable monthly space rental cost? If so, what long-term parking options are available for tenants? (It does appear there are many short-term parking lots within a reasonable distance in the general Downtown area, which can accommodate visitors to the building's cafe, childcare facility, teaching kitchen, art spaces, events, etc.) Closely related: are there any car sharing options (a la Zipcar or equivalent) offered within ready walking distance of the building, if a tenant might need occasional, temporary use of a car? Am seeing several car rental agencies, including Thrifty and Enterprise, near the Cherry Capital Airport, but those seem to be around 1.5-2 miles from the building? (And there's generally more time and paperwork involved in renting from such agencies than via a car sharing service, which often allows fairly easy-to-make reservations via mobile apps.)

Kate R. Traverse City, MI 12 months ago Commongrounds Cooperative Entrepreneur

Thanks for your careful review of our documents! There are long-term parking spots for $50/month at nearby parking ramps (about .5 miles away). That said, we are prioritizing providing housing for people working within walking, biking, and busing distance of the building so there may be some residents who are able to do away with the expense of a car if they can live close to where they work. Focus groups we did for the housing suggested there was demand for this. Traverse City does not currently have car share services but we would be glad to accommodate onsite if they became available. Car rentals are feasible, in particular because Enterprise will pick you up and take you to their agency to get the car.

Aron R. Pinole, CA 12 months ago

Excellent - thanks, Katherine! As someone who lived without a car until my early 30s, and know others who are currently doing so, it's definitely feasible, given transit options and close-in availability of shopping and other services. Great to know that there's affordable parking nearby, if you do have residents (perhaps particularly who may be older or have some physical disabilities, ongoing or short-term) and need full-time access to a car. And appreciate the reminder about Enterprise's pick-up service, as well!

Aron R. Pinole, CA 12 months ago

With apologies if I've come in like the proverbial "bull in a china shop" with all these questions, am hoping they're valuable for you and others at the coop, who may have already (or if not, might in the future) encounter some of these same queries. Also, would it be possible to have a look at my additional questions, posed as replies to Jordan W's query of about 3 months ago, "Hi, can you clarify on the investing process," near the bottom of Mainvest's discussion section. Thanks in advance as well! I'm going to become one of your owners and very modest investors. Commongrounds drawing guidance and inspiration from EBPREC, here in the SF Bay Area, is really cool!

Aron R. Pinole, CA 12 months ago

Love the concept behind this project! Is there a preferred, non-spammy way to suggest a product - in this case, a sustainable shower head built by a small, family-owned business in the California mountains - that might be included in the project specifications? I read the update on the cooperative's website spotlighting Ray Kendra, the project architect, and noted that this will be a LEED-certified building, for which such a product might be a good fit.

Kate R. Traverse City, MI 12 months ago Commongrounds Cooperative Entrepreneur

https://mainvest.com/b/commongrounds-cooperative-traverse-city#data

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Sorry, we have already have showerheads on order for the building!

Aron R. Pinole, CA 12 months ago

Dang! Thanks for letting me know!

Kathleen (& John) D. Traverse City, MI about 1 year ago

This is a grand idea for the Traverse City young adults. May it thrive and grow!

Nicholas B. Traverse City, MI about 1 year ago

WOOOOHOOOO

Jackie D. about 1 year ago

Please tell me more about

Kate R. Traverse City, MI about 1 year ago Commongrounds Cooperative Entrepreneur

Hi, Jackie! I think maybe the end of your thought was cut off. Please feel free to share any questions!

Janelle Christine S. Flushing, NY about 1 year ago

As a proud MSU alumni, I am happy to make a small investment to Cooperative Common Grounds. Thank you!

Kate R. Traverse City, MI about 1 year ago Commongrounds Cooperative Entrepreneur

Thanks, Janelle!

Janelle Christine S. Flushing, NY about 1 year ago

As an MSU Alumni, I am so glad I was able to make a small investment for the new year! Mazel Tovi!

Paul L. Chicago, IL about 1 year ago

Hello. I recently made an investment in the co-op and am excited to see this project come to fruition. I also became an "owner" and paid the $50 membership fee on your website. Is there anything else I need to complete for the investment to go through? My understanding is that I need to be an owner to invest, but I made the investment first and then signed up on the website. Does anything further need to be done?

Kate R. Traverse City, MI about 1 year ago Commongrounds Cooperative Entrepreneur

Hi, Paul - I think you've covered your bases! Mainvest will "close" on all outstanding investments since our last close date when we reach our funding deadline in a couple of weeks. Thanks so much for your support.

Paul L. Chicago, IL about 1 year ago

I am very excited to support this project as a forward-thinking solution to affordable housing and supporting small local businesses.

William D. Tucson, AZ about 1 year ago

What is the rate of the late payment charge that will be assessed if the Annual Dividend is not paid on time to the investor? The Investor Agreement states "an annual rate equal to five percent (6%)" Is it 5% or 6%?

Kate R. Traverse City, MI about 1 year ago Commongrounds Cooperative Entrepreneur

Thanks for your careful reading, it looks like you found a typo. The correct rate is 6% - equal to the annual preferred return. We will get that corrected in the main document. Thank you!

Renee B. Williamsburg, MI about 1 year ago

I invested because I want to support the positive social and community impact this project offers our city.

Andrew L. Traverse City, MI about 1 year ago Commongrounds Cooperative Entrepreneur

Thank you Renee-- Welcome to Commongrounds!

Emily M. Traverse City, MI about 1 year ago

I invested because I want to contribute to this forward-looking, ethical, relentlessly positive, home-town community.

Andrew L. Traverse City, MI about 1 year ago Commongrounds Cooperative Entrepreneur

Thank you, Emily!

Keelan M. Traverse City, MI about 1 year ago

CARPE DIEM

Barbara N. New York, NY about 1 year ago

LOVE the idea of a community-owned co-op real estate project! Supporting from afar.

Andrew L. Traverse City, MI about 1 year ago Commongrounds Cooperative Entrepreneur

Thank you, Barbara!

Tiffany N. Warren, MI about 1 year ago

Very excited to see this take off

Andrew L. Traverse City, MI about 1 year ago Commongrounds Cooperative Entrepreneur

We are, too! Thank you for your investment, Tiffany!

JEAN K. Traverse City, MI about 1 year ago

This is such a worthwhile project. I am proud to offer my support!!

https://mainvest.com/b/commongrounds-cooperative-traverse-city#data

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Kate R. Traverse City, MI about 1 year ago Commongrounds Cooperative Entrepreneur

Awwwww, thanks, Jean!!

JEAN K. Traverse City, MI about 1 year ago

Northern Michigan is privileged to enjoy the leadership of your team.

Brent w. Traverse City, MI about 1 year ago

I invested because this community space has the potential to enhance the arts scene in Northern Michigan!

Andrew L. Traverse City, MI about 1 year ago Commongrounds Cooperative Entrepreneur

Thank you, Brent!

Kate R. Traverse City, MI about 1 year ago Commongrounds Cooperative Entrepreneur

Can't wait for the special nutcracker holiday performances!!

Michael M. Traverse City, MI about 1 year ago

I invested because it's a brilliant concept to allow neighborhoods to influence the development of communities by the very same people who live and are directly affected by them.

Andrew L. Traverse City, MI about 1 year ago Commongrounds Cooperative Entrepreneur

We couldn't agree more. Thank you, Michael!

Josh S. Frankfort, MI about 1 year ago

KaKaww!

Andrew L. Traverse City, MI about 1 year ago Commongrounds Cooperative Entrepreneur

Caw!! Thank you, Josh!

Robert T. Canton, MI about 1 year ago

I invested because it's nice to support a project somewhat local.

Andrew L. Traverse City, MI about 1 year ago Commongrounds Cooperative Entrepreneur

Thank you, Robert!

Jason P. Pittsburgh, PA about 1 year ago

Great to see another real estate cooperative! Congrats on the success so far!

Andrew L. Traverse City, MI about 1 year ago Commongrounds Cooperative Entrepreneur

Thank you, Jason!

meg z. Traverse City, MI about 1 year ago

Proud to support Commongrounds!!

Andrew L. Traverse City, MI about 1 year ago Commongrounds Cooperative Entrepreneur

And Commongrounds is proud to have you on board! Thank you, Meg!

Andrew L. Traverse City, MI about 1 year ago Commongrounds Cooperative Entrepreneur

Here's to a brighter, more equitable future for all members of our community!

Kate R. Traverse City, MI about 1 year ago Commongrounds Cooperative Entrepreneur

Here, here ; )

JEAN K. Traverse City, MI about 1 year ago

Please use my $$ toward Arts and Music.

Andrew L. Traverse City, MI about 1 year ago Commongrounds Cooperative Entrepreneur

Yes! Thank you, Jean!

Mary V. Traverse City, MI about 1 year ago

Nice to have a local investment for something we can believe in!

Andrew L. Traverse City, MI about 1 year ago Commongrounds Cooperative Entrepreneur

Thank you Mary!

Kate R. Traverse City, MI about 1 year ago Commongrounds Cooperative Entrepreneur

Mary, you're a hero! Thanks so much for your generous support.

John and Sally E. Traverse City, MI about 1 year ago

I invested because we believe in supporting small businesses in Traverse City.

Andrew L. Traverse City, MI about 1 year ago Commongrounds Cooperative Entrepreneur

https://mainvest.com/b/commongrounds-cooperative-traverse-city#data

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Commongrounds and our community of tenants are grateful for your support. Thank you, John and Sally!

MJ F. Traverse City, MI about 1 year ago

I'm so happy for our community! I've been involved with Non profits most of my life and to see all that will be incorporated within this one structure is very exciting!

Andrew L. Traverse City, MI about 1 year ago Commongrounds Cooperative Entrepreneur

Thank you, MJ! We are overjoyed that our community has said "yes" to making the place we love better, together.

PETER K. Traverse City, MI about 1 year ago

I invested because investing in Commongrounds Cooperative is investing in our community!

Andrew L. Traverse City, MI about 1 year ago Commongrounds Cooperative Entrepreneur

Thank you, Pete!

Alyssa G. Lake Ann, MI about 1 year ago

Community and the arts is what keeps my own small business alive. I'm excited for this!

Andrew L. Traverse City, MI about 1 year ago Commongrounds Cooperative Entrepreneur

Thank you, Alyssa!

Jonathan T. Traverse City, MI about 1 year ago

I'm very excited for this community resource! Thank you for including me in this investment opportunity.

Andrew L. Traverse City, MI about 1 year ago Commongrounds Cooperative Entrepreneur

Thank you, Jon. Welcome to the flock!

John S. Flushing, MI about 1 year ago

Is there a way to get the well recognition without the $2000 level?

Andrew L. Traverse City, MI about 1 year ago Commongrounds Cooperative Entrepreneur

Hi John, great question. Investor presence on our recognition well in the building actually starts at the Toucan level ($500+). Higher level investors like Blue Jay ($2000+) or above can expect their well impression to be more pronounced.

Joshua H. Lake Ann, MI about 1 year ago

I invested because I believe in that communities benefit the most when the people in the community do what they can to help out. It doesn't matter the amount, everything helps.

Andrew L. Traverse City, MI about 1 year ago Commongrounds Cooperative Entrepreneur

Thank you, Joshua!

Jonathan D. Traverse City, MI about 1 year ago

I recently made three investments and wondered if there was a total accrued investment that went towards the total to get certain parks as I've invested a total to gain the Toucan, Double Down and Blue Jay investor parks.

Andrew L. Traverse City, MI about 1 year ago Commongrounds Cooperative Entrepreneur

Yes! Thank you for your investment, Jonathan. Investments for this round are cumulative, and the Blue Jay level of investment includes the Toucan parks!

Brandy G. Traverse City, MI about 1 year ago

So excited to have this wonderful addition to the neighborhood!

Andrew L. Traverse City, MI about 1 year ago Commongrounds Cooperative Entrepreneur

Thank you, Brandy!

Catherine O. Grand Rapids, MI about 1 year ago

I invested because it is a unique opportunity to support a valuable project of our community keeping our dollars local.

Kate R. Traverse City, MI about 1 year ago Commongrounds Cooperative Entrepreneur

Thank you, Cathy!!!

Edward L. Bronx, NY about 1 year ago

Good morning, can I still invest more(thanks in advance)?

Kate R. Traverse City, MI about 1 year ago Commongrounds Cooperative Entrepreneur

Hi, Edward - you bet! Mainwest should let you increase your amount or just invest again. You can use their chat feature if you have any problems. Thanks for your interest!

Mark D. Traverse City, MI about 1 year ago

Just expanded my business and transferred everything to Traverse City. Commongrounds building caught my attention while learning my way around town, did some reading and I love this concept. I couldn't think of a better way to become involved with the community.

Kate R. Traverse City, MI about 1 year ago Commongrounds Cooperative Entrepreneur

Awesome, thank you, Mark! Welcome to TC.

Mark D. Traverse City, MI about 1 year ago

https://mainwest.com/b/commongrounds-cooperative-traverse-city#data

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Thank you Katherine. Its greatly appreciated, happy to be here.

Linda S. Traverse City, MI about 1 year ago

I supported this to add to affordable housing in my community.

Kate R. Traverse City, MI about 1 year ago Commongrounds Cooperative Entrepreneur

Thank you so much, Linda.

Ryan W. Traverse City, MI about 1 year ago

Arrived here a year ago and happy to support a new place to meet, work, and hang out with others in the neighborhood.

Kate R. Traverse City, MI about 1 year ago Commongrounds Cooperative Entrepreneur

Excellent, thank you, Ryan! And welcome.

Cyntresse C. Rochester, NY about 1 year ago

Glad I found this opportunity to invest in a great company idea.

Andrew L. Traverse City, MI about 1 year ago Commongrounds Cooperative Entrepreneur

Thank you, Cyntresse!

Colleen M. Traverse City, MI about 1 year ago

I invested because I'm excited to see how this all comes together!

Andrew L. Traverse City, MI about 1 year ago Commongrounds Cooperative Entrepreneur

Thank you, Colleen!

Kate R. Traverse City, MI about 1 year ago Commongrounds Cooperative Entrepreneur

Yay, thank you so much, Colleen.

Nancy C. Parsippany, NJ about 1 year ago

What is the difference between the 6% dividend and the 3% social impact dividend?

Andrew L. Traverse City, MI about 1 year ago Commongrounds Cooperative Entrepreneur

Great question, Nancy! The impact return option essentially splits the 6% earned interest in half-- directing 3% to the investor, and the other 3% back to the cooperative board to be invested in categories that enhance the building's community impact. Examples for the use of those funds could be: added or supported programming in the building, added amenities, facility improvements, public art and events, and more. Hope that answers your question, but don't hesitate to reach out for more information. Thank you for your interest!

Mark E. Jacksonville, FL about 1 year ago

So going off of your example of investing $100.00. If I invest $100.00 then I earn will forever $6.00 a year? As in, it doesn't matter how well the project does, my $100.00 investment will only yield a fixed $6.00 a year return on investment?

Kate R. Traverse City, MI about 1 year ago Commongrounds Cooperative Entrepreneur

Hello, Mark, thanks for your interest. Correct, 6% is the maximum return for these investment certificates. As a real estate cooperative, our profits are returned to our member-owners in proportion to how much they use our real estate and services. So there are opportunities for owners to receive additional returns down the road if they are using the cooperative but this investment certificate is structure at a fixed return.

Nathaniel E. Denver, CO about 1 year ago

My wife (Marie Evans) has family roots in this area and worked for Higher Grounds coffee shop when she lived there in 2016. We're happy to support!

Kate R. Traverse City, MI about 1 year ago Commongrounds Cooperative Entrepreneur

That's fantastic! Smell world ; )

Edmund B. Grosse Pointe Woods, MI about 1 year ago

A beautiful building with great heart!

Kate R. Traverse City, MI about 1 year ago Commongrounds Cooperative Entrepreneur

Thanks, Edmund!

Nathaniel E. Denver, CO about 1 year ago

I love this project and plan on investing something but I am a bit confused as to how the ROI goes. Usually on Mainvest there's a multiplier (such as 1.5X) but I don't see anything like that on here. Does that mean that investors just get what they invested back? As in invest 100$ and get 100$? Or is there potential to get back more than is invested?

Kate R. Traverse City, MI about 1 year ago Commongrounds Cooperative Entrepreneur

Thanks so much for your interest! We will pay a 6% annual preferred return starting when the building is completed (projected fall 2022). When you exit, you will get the same amount you invested back but you will have earned the return. Because it is a preferred return rather than guaranteed, if there is a year that the project is financially struggling, instead of paying our investors cash, we will effectively compound it (add it to the principal to be repaid when you exit and pay 6% interest on it until then). Just let us know if that isn't clear or you have more questions.

Nathaniel E. Denver, CO about 1 year ago

It's more clear but not quite all clear yet. Could you put that in real numbers in dates using 100$ as an example? That would help. Also could you explain the "when you exit" part. Is that decided upon by me or the coop and when might that be?

Kate R. Traverse City, MI about 1 year ago Commongrounds Cooperative Entrepreneur

If you invest $100, you will earn $6 each year in 2023, 2024, 2025, and 2026. (In 2022, you will earn a pro-rated return based on when the building opens- probably, $2). If we failed to pay a return, for example, in 2023, we

https://mainvest.com/b/commongrounds-cooperative-traverse-city#data

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would add it to your initial investment and pay the return on $106 (so you would earn $6.36 in future years, and be paid $106 when you exit).

Kate R. Traverse City, MI about 1 year ago Commongrounds Cooperative Entrepreneur

For exiting: After 5 years, you will have an annual option to stay in or leave. If you stay in, we will continue to pay the $6/year return. Technically we have the option to buy you out after 5 years, but our intent is to let people leave their money in the project if they want to do so.

Jennifer Y. Traverse City, MI over 1 year ago

¡Viva Commongrounds!

Kate R. Traverse City, MI about 1 year ago Commongrounds Cooperative Entrepreneur

Yesssssssss!

Bruce O. Grand Rapids, MI over 1 year ago

How are investments secured at this phase?

Kate R. Traverse City, MI over 1 year ago Commongrounds Cooperative Entrepreneur

Hi, Bruce! These investments are owner equity investments, which is technically different than a loan that is secured or unsecured. However, community owner investment equity is basically the bottom of the capital stack in priority (ahead only of tenant-owners). If Commongrounds went under, and we sold the building and the land, first we would pay back all banks and lenders, and then the community owners. Because the building is under construction and financed for completion, it is less risky than our original raise, and we are hopeful that the value of the completed building/land will exceed our debt. But that is unknown and there is risk.

Nadeen K. Chicago, IL over 1 year ago

local local local :)

Andrew L. Traverse City, MI over 1 year ago Commongrounds Cooperative Entrepreneur

Thank you. Nadeen!

Russell S. Traverse City, MI over 1 year ago

Invest in the community you love.

Andrew L. Traverse City, MI over 1 year ago Commongrounds Cooperative Entrepreneur

Thank you, Russ!

Michelle D. Dayton, OH over 1 year ago

flock yeah! Commongrounds!

Andrew L. Traverse City, MI over 1 year ago Commongrounds Cooperative Entrepreneur

Thank you, Shelly! Caw! Caw!

Nicholas B. Traverse City, MI over 1 year ago

Lauren and I are so proud to have Commongrounds in our community, standing as a living testament to the values which make Northern Michigan so unique. We're also happy to support the work by investing our tens of dollars in it...

Andrew L. Traverse City, MI over 1 year ago Commongrounds Cooperative Entrepreneur

Thank you, Nick. We are grateful for all you have contributed!

Charlene A L. Traverse City, MI over 1 year ago

I invested because I believe in this concept-wholly unique.

Kate R. Traverse City, MI over 1 year ago Commongrounds Cooperative Entrepreneur

Thank you, Charlene!

Jordan W. Brooklyn, NY over 1 year ago

Hi, can you clarify on the investing process? Do I only go through the process on the Mainvest site or do I have to also create an account on the Commongrounds site?

Kate R. Traverse City, MI over 1 year ago Commongrounds Cooperative Entrepreneur

Hi, Jordan! You invest through the Mainvest site. I'll make sure that is clear on our Commongrounds website as well. Thanks for your interest!

Jordan W. Brooklyn, NY over 1 year ago

Hi Katherine, In the investor agreement it says "NOTE: IF MEMBER IS NOT ALREADY A COMMUNITY OWNER, MEMBER MUST ALSO COMPLETE A CLASS C COMMUNITY OWNER APPLICATION (AVAILABLE AT WWW.COMMONGROUNDS.COOP/JOIN)". If I invest through Mainvest, does this require filling out an application and paying an additional fee to join the coop? Just want to make sure I understand it correctly.

Kate R. Traverse City, MI over 1 year ago Commongrounds Cooperative Entrepreneur

Hi, Jordan - Yes, you will have to sign up as a community owner ($50 share purchase), and then invest through Mainvest. All investors must be community owners. Just let me know if you have questions about what that means.

Aron R. Pinole, CA 12 months ago

Thanks, Katherine. Am seeing this web page; does this fully describe the nature of community ownership? https://www.commongrounds.coop/about-ownership

Aron R. Pinole, CA 12 months ago

Also, the Community Member application notes, "Commongrounds Cooperative is a real estate development cooperative that offers everyone in our region the opportunity to participate ..." Is residency (current or future) in Upper Michigan a requirement? An expectation? A nice-to-have, but owners (and investors) are welcome from elsewhere, as well?

Aron R. Pinole, CA 12 months ago

https://mainvest.com/b/commongrounds-cooperative-traverse-city#data

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1/18/23, 6:04 PM

Invest in Commongrounds Cooperative | Real Estate in Traverse City, MI

One last question: if something goes awry in the building or among the people living, working at, or visiting it, are Community Members (aka community owners) liable? (Pertinent here, since to invest via this Mainvest crowdfunding campaign requires signing up for community ownership.) I couldn't find that mentioned in any documents on the coop's website, save for the Indemnification section (Article 8) in the co-op's bylaws. Thanks!

Kate R. Traverse City, MI 12 months ago Commongrounds Cooperative Entrepreneur

Hi, Aron! Thanks for pointing me to these questions. I'm answering all three here: the website has the basics of community ownership just let me know if you have additional questions. There is no residency requirement and welcome community owners from affinity communities that just support the project concept as well as geographic communities. If something goes wrong, community owners are not liable for the cooperative's actions. Like other corporations, there is a liability shield for owners. Of course, if the cooperative goes under, then your investment would be at risk but nothing beyond that. Thanks for your interest!

Aron R. Pinole, CA 12 months ago

Thanks! Appreciate this directly responsive and reassuring info. I've submitted a member/owner application and made a small investment here on Mainvest. (One question: I wasn't asked to pay the $50 membership/ownership fee, on submitting the application. Will that payment request be coming later via an email, or?)

Kate R. Traverse City, MI over 1 year ago Commongrounds Cooperative Entrepreneur

I invested because I love owlsome bird puns.

Nicholas B. Traverse City, MI over 1 year ago

This makes me want to uninvest...

Commongrounds Cooperative isn't accepting investments right now, but is trying to get a sense of how they should structure their offering. You will not need to provide any money, and we won't be accepting money or selling securities, until all of its forms with the SEC and you have no obligation to ultimately invest. All investments must be done through Mainvest.com. Once the offering goes live, you'll be able to invest if you so choose.

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https://mainvest.com/b/commongrounds-cooperative-traverse-city#data

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### UNITED STATES SECURITIES AND EXCHANGE COMMISSION
**Washington, D.C. 20549**

## FORM C

### UNDER THE SECURITIES ACT OF 1933

### Issuer Information

**Name of Issuer:** Commongrounds Cooperative

**Legal Status:** Corporation

**Jurisdiction of Incorporation/Organization:** MI

**Date of Organization:** 03-22-2018

**Physical Address:** 425 BOARDMAN AVE, TRAVERSE CITY, MI, 49684

**Issuer Website:** http://www.commongrounds.coop/

**Is there a Co-Issuer?:** No

**Intermediary Name:** MainVest, Inc.

**Intermediary CIK:** 0001746059

**Intermediary File Number:** 007-00162

### Offering Information

**Compensation to Intermediary:** MainVest will be paid 5.0% of the final offering amount, upon the successful completion of the offering. MainVest does not receive compensation if the offering does not succeed.

**Financial Interest in Issuer:** MainVest, Inc. owns no interest in the Company, directly or indirectly, and will not acquire an interest as part of the Offering, nor is there any arrangement for MainVest, Inc. to acquire an interest.

**Type of Security Offered:** Other

**Other Description of Security:** Investment Certificates

**Number of Securities Offered:** 100000

**Price per Security:** $1.00

**Method for Determining Price:** The Investment Certificates are being valued at their face value. We don't anticipate that we'll ever need to place a value on the Notes in the future.

**Target Offering Amount:** $100,000.00

**Oversubscription Accepted:** Yes

**Oversubscription Allocation Type:** First-come, first-served basis

**Maximum Offering Amount:** $1,000,000.00

**Deadline to Reach Target Amount:** 05-01-2023

### Annual Report Disclosure Requirements

**Current Number of Employees:** 2.00

**Total Assets (Most Recent Fiscal Year):** $77,330.95

**Total Assets (Prior Fiscal Year):** $0.00

**Cash & Cash Equivalents (Most Recent Fiscal Year):** $0.00

**Cash & Cash Equivalents (Prior Fiscal Year):** $0.00

**Accounts Receivable (Most Recent Fiscal Year):** $0.00

**Accounts Receivable (Prior Fiscal Year):** $0.00

**Short-Term Debt (Most Recent Fiscal Year):** $0.00

**Short-Term Debt (Prior Fiscal Year):** $0.00

**Long-Term Debt (Most Recent Fiscal Year):** $165,325.03

**Long-Term Debt (Prior Fiscal Year):** $0.00

**Revenues/Sales (Most Recent Fiscal Year):** $0.00

**Revenues/Sales (Prior Fiscal Year):** $0.00

**Cost of Goods Sold (Most Recent Fiscal Year):** $0.00

**Cost of Goods Sold (Prior Fiscal Year):** $0.00

**Taxes Paid (Most Recent Fiscal Year):** $0.00

**Taxes Paid (Prior Fiscal Year):** $0.00

**Net Income (Most Recent Fiscal Year):** $-106,146.08

**Net Income (Prior Fiscal Year):** $0.00

**Jurisdictions Offered:**

ALABAMA, ALASKA, ARIZONA, ARKANSAS, CALIFORNIA, COLORADO, CONNECTICUT, DELAWARE, DISTRICT OF COLUMBIA, FLORIDA, GEORGIA, HAWAII, IDAHO, ILLINOIS, INDIANA, IOWA, KANSAS, KENTUCKY, LOUISIANA, MAINE, MARYLAND, MASSACHUSETTS, MICHIGAN, MINNESOTA, MISSISSIPPI, MISSOURI, MONTANA, NEBRASKA, NEVADA, NEW HAMPSHIRE, NEW JERSEY, NEW MEXICO, NEW YORK, NORTH CAROLINA, NORTH DAKOTA, OHIO, OKLAHOMA, OREGON, PENNSYLVANIA, PR, RHODE ISLAND, SOUTH CAROLINA, SOUTH DAKOTA, TENNESSEE, TEXAS, UTAH, VERMONT, VIRGINIA, WASHINGTON, WEST VIRGINIA, WISCONSIN, WYOMING

### Signatures

**Issuer:** Commongrounds Cooperative

**Signature:** Katherine Redman

**Title:** Program Director

---

**Signature:** Katherine Redman

**Title:** Program Director

**Date:** 01-19-2023