Details on terms
All investors must join as an owner of the Cooperative. The Investment Certificates provide owner-investors with an opportunity to earn an equity-like dividend return, beginning after Year 3, which will be disbursed annually from there forward until the 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 7% annually on the amount invested, while the social impact rate will be 1.5% annually, with an additional 5.5% 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 6, contingent upon the Cooperative obtaining replacement capital. In addition to the Cooperative returning the investor's capital, if the investor holds their investment for more than 10 years, regular return investors will receive an additional 20% bonus when their capital is returned, and social impact investors will receive a 10% bonus. Investors will also receive perks as outlined below. Details are available in the document attached.
(1) Annual coworking membership at Commonplace (about $1,500 value), (2) Six month Table Lifestyle membership with massage, personal health, movement, and nutrition options, (3) Four tickets to six shows OR use of event space for one day, (4) Free Iron Fish barn rental for private party (Sat excluded, must be used by 2020, guest responsible for planning/food/bev costs), (5) Higher Grounds consultation on a personalized home brewing system and $200 Coffee Bar credit, (6) Large plaque/brick with your name in the building, and (7) One week per year in the Commongrounds Coop suite overlooking the Boardman River.
All $10,000+ perks AND (1) Annual coworking membership at Commonplace (about $1,500 value), (2) Three month Table Lifestyle membership with massage, personal health, movement, and nutrition options, (3) Two tickets to six shows, (4) Two nights per year in Commongrounds Coop suite overlooking Boardman River, (5) Free use of gallery event space/guided tour for private party at Iron Fish Distillery (must use by 2020), (6) Private Higher Grounds coffee cupping and tour for six people, and (7) large plaque/brick with your name in the building.
$10,000+ Investment Level
All $2,000+ perks AND (1) free Commongrounds Coop membership (about $100 value), (2) One free Table Movement Studio class per month, (3) Two tickets to two shows (and early access to choose tickets), (4) Six months Higher Grounds coffee subscription, and (5) Ten hours of meeting time per year in Commonplace.
$2000+ Investment Level
All $500+ perks AND (1) daily beverage discounts including $1 Higher Grounds coffee Daily Brew, (2) 10% off first Iron Fish cocktail, (3) One free Commonplace coworking pass every month, (4) Three free Table Movement Studio classes per year, (5) One ticket to a show (and early access to select!) and (6) Like something a bit more 'concrete'? How about your name on our recognition/gratitude wall!
$500+ Investment Level
(1) Exclusive building tours before grand opening, (2) Free admission to grand opening party, (3) Free admission to annual investors party (like a flock star), (4) Swag, (5) Discounted food/drink and free admission to events on community investor days (2x per year), (6) Like something a little more 'concrete'? How about your name in our recognition/gratitude wall!
Hurry! These rewards expire Feb 21!
Limited (awesome) BONUS rewards for investors who commit to invest by the end of the Flock Party at Rare Bird on 2/21! No need to attend the event to receive the rewards if you have already invested. Each investor can choose ONE bonus reward from the list and first to invest gets first pick (quantities of each reward are limited). Rewards include ten-class packages at Table Movement Studio, reserved underground bike parking spot at Commongrounds, use of private event space at Iron Fish Distillery or the new event space in Commongrounds, one year subscription of Higher Grounds coffee, and much more! You can read more detail on the bonus rewards on our website.
This is an overview of the previous and planned financings of the business, including the capital needs the business is looking to cover in the current financing.
Additional Funding Uses for capital raised outside of this Offering
The capital raised in this Offering represents a subset of the capital needed for the entire project. The funding uses for the entire project are outlined below, to be financed through the various financing vehicles outlined above.
PROJECT COSTS $13,455,864.00
Includes: land acquisition, master planning, civil engineering, survey, topography, approvals, road, utilities, environmental
Building + Construction Costs $11,901,898.00
Includes: 10% contingency; 24 residential units, retail/ commercial/office space, underground parking, foundations, site cleanup, exterior materials. (Assumes $187.50/sf comml and $265.10/sf residential construction costs)
Soft Costs $1,553,966.00
Includes: Construction loan interest and fees, permits, architectural, communications, legal/accounting, engineering, reserve, insurance, “developer fee” of 2.8% (development team consultants)
Financial projections are subject to certain risks of the business and may not be achieved. Projections only contemplate projected cash flows, are unaudited and may not be formulated in accordance with US Generally Accepted Accounting Principles. Consult the investment materials for more information on business specific risks and a discussion of the key risks that may impede the achievement of the revenue forecasts presented. There is no guarantee that an investment may achieve any level of return. Review our Risks of Investing before making an investment decision.
Who are your target customers?
As a real estate cooperative, our customers are people who purchase shares in the cooperative with the intent to participate in the Cooperative's facilities and services, including use of the services and the facilities offered by the Cooperative when the real estate development is completed. We have a target of 500 Class C community owners by the end of our investment campaign. We also have a target of selling T-1 shares to lease all rentable space on the first and second floor of the cooperative. T-1 owners will be businesses and nonprofits interested in operating their organization on the premises of the development after construction.
In general, Commongrounds is targeting as owners individuals who purchase shares in the cooperative with the intent to participate in the Cooperative's facilities and services, including use of the services and the facilities offered by the Cooperative when the real estate development is completed. We expect most customers will have an interest in helping to develop community-orientated real estate and an appreciation for Traverse City, community-building, local investment, and/or alternative real estate funding models.
Do you have current customers?
As of February 3, 2019, just over 400 Class C community owners have applied for ownership at a cost of $50 per share. We also have 6 organizations (business and nonprofits) who have signed a letter of intent to purchase Class T-1 (tenant ownership) shares. Class T-1 ownership shares will be priced on the actual cost for the cooperative of constructing, operating, and financing the building. Please refer to the cooperative bylaws for more information.
What is your current customer pipeline?
We anticipate 500 Class C community owners by the completion of the crowdfunding campaign. Our T-1 shares are fully committed other than tenants who will be partners or subtenants of an already committed tenant.
What market(s) are you in?
Real estate development and operation at 416 E. Eighth Street in Traverse City, Michigan.
Who are your competitors?
There are currently no other real estate cooperatives offering the opportunity to own a building in Traverse City.
As a result, for Class C target customers, there is no direct competitor as there are no other real estate cooperatives offering the opportunity to own a building in Traverse City that is developed and operated by a community-orientated and -owned real estate cooperative. Class C customers are likely investing their money in managed funds in publicly traded companies or in their personally-owned real estate.
For Class T-1 target customers, there is no competition offering similar arrangements. T-1 owners currently could either (1) rent space or (2) undertake their own real estate development to purchase and develop property to suit their organization's needs. Option 1 does not offer the opportunity to build equity in their property or to operate the building as "landlord" in partnership with the other T-1 tenants. Option 2 is significantly more work and risk for an individual tenant and would not involve co-locating with other T-1 tenants whose organizations and business offer possibility for improved services, shared customers, and reduced risk for each individual T-1 tenant organization.
What is your competitive advantage?
Commongrounds is a unique real estate developer because we are owned by our future tenants and our community. Our mission to develop real estate in a manner that allows the community to participate so that we can together make the Traverse City our owners already love even better.
How do you sell your product or service?
Anyone can submit a Class C application for ownership on our website. Class T-1 ownership shares are only available through individual agreements and conversations. They are not publicly available for purchase. We do not have any sales representatives or anyone earning commission on the sale of ownerships.
How do you market your product or service?
We advertise the shares through individual solicitation to friends, family, and pre-existing networks, organizations, and other relationships in the Traverse City region; and through social media. We have also received some press attention.
What is your product development timeline?
We expect to complete our owner capital raise by April 2019 and break ground in May 2019. The grand opening of the building is expected by Fall 2020 after about 16 months of construction. Class C owners can being to use the facilities and services in the building at that time. The T-1 tenant owners (Pathways Preschool, Higher Grounds, Commonplace, and Crosshatch) will be operating their businesses out of the building by the time of the grand opening.
Provide us with some background on your products and services.
Class C community ownership and capital make it possible for us to build 416 E. Eighth St. In turn, community owners can receive a financial, social, and community return on their ownership because of the building. It creates opportunity for owners and their neighbors to live, work, and play in a space where workforce housing, childcare, design, arts, individual and community wellness, craft food and beverage, and nonprofit and small business organizations intersect to collide and collaborate.
What is your production process?
Commongrounds Cooperative has been developing building designs and securing financing and tenant partnerships since winter/spring 2018. The building will be constructed at 416 E. Eighth Street in Traverse City, Michigan.
Provide detail on your hiring plans
Prior to building completion, Commongrounds is operated by a board supervising a project development team consisting of contractors (including the architect, construction manager, owner's representative, and communications and financing team). As the building nears completion, the real estate cooperative expects to hire at least 2 full-time employees fulfilling: executive management and administration, communications and marketing, property management, community development, and events planning.
What is the composition of your current team?
Please see the Commongrounds Project Narrative for more information our team. Our current team includes:
Board of Directors & Future Tenant Partners (Higher Grounds Coffee & Trading Company, Commonplace, Iron Fish Distillery, Crosshatch Center for Art &Ecology/May Erlewine, Pathways Preschool, Table Health)
Project Director (Commonplace Law/Kate Redman)
Building Team (Environment Architects/Ray Kendra, Hallmark Construction, Nan Perez, and Ed Bailey)
Financing Team (Sakura Rafferty, Megan Olds)
Communications Team (Joey DiFranco, Andrew Straley, Elise Crafts, Kate Rose)
We are also fortunate to have many advisors and supporters within the community, including Joe Sarafa, an experienced real estate developer, and our LLC investment partners (Jim Olson, Judy Bosma, Mike & Claudia Delp, Laura and Bob Otwell, Kathy Dally, David Koss).
Kate is a community enterprise attorney and founder of Commonplace Law and Commonplace, a coworking space and future tenant of Commongrounds.
"Because I can't wait to hang out in this building!"
Richard is the Co-owner of Iron Fish Distillery, Michigan's first farm distillery and future tenant in collaboration with Higher Grounds and a restaurant operator.
"Joining the Birdhouse allows me to work with a crazy great and audacious group of people working to create a values inspired intentional community and with it, an urban landscape that supports the talent that makes Traverse City what it can be."
Chris is the co-founder of Higher Grounds Trading Company, future tenant of Commongrounds.
"To germinate community-based development that addresses the needs of the ecosystem, workforce, and local population with spaces that foster a sharing and collaborative economy."
Megan Olds, Fund Development
Megan supports communities and organizations as the founder of Parallel Solutions LLC, and serves on the board of directors of Commonplace, a coworking space and future tenant of Commongrounds.
"I’m energized by the opportunity for everyone in the community to invest and generate equity in a real estate development project."
Nan Perez, Construction Owners Representative
"Commongrounds encompasses some of my most treasured passions in my most treasured hometown: construction, building community & connections, and coffee. Let’s put a shovel in the ground!"
Ray Kendra, Architect
Ray is founder of Environment Architects and specializes in environmental, green design, and architecture throughout Northern Michigan.
"I want to help facilitate an integrated design and process for a unique community driven development."
Sakura Takano, Financing Lead
"I’m excited to optimize federal, state, and local resources to develop and implement workforce and housing solutions in Traverse City."
Elise Crafts, Communications
Elise is founder of Statecraft and co-director of Commonplace, future tenant of Commongrounds.
"I love people, animal puns, and well-designed spaces. I’m eager to connect with the many birds who make this project possible."
Joey DiFranco, Communications
Joey is the Creative Director at TentCraft, SEEDS board member and vintage camper enthusiast.
"I strongly believe that when we all work together as a community, amazing things happen in Traverse City."
Andrew Straley, Communications
Andrew is a digital marketer at TentCraft in Traverse City and proud early bird owner.
"I want to be a part of and help build a community that inspires the people of Traverse City."
Ed Bailey, Construction Management Advisor
"My interest in the project is about the opportunity to work with the people involved. Having a great project also helps."
Higher Grounds Trading Company
Iron Fish Distillery
Hallmark Construction is Northern Michigan's leading construction and development company, located in Traverse City, MI.
About Commongrounds Cooperative
|Location Type||Co Working Space|
|Comments||Commongrounds current office is in Commonplace, a coworking space and future second floor tenant of Commongrounds.|
Risks & Disclosures
No assurances of sufficient financing; Additional capital may be required
Although the Company believes the proceeds of this Offering, along with other planned financings, will provide adequate funding to develop and successfully support its business plans, there can be no assurances that such funds will be adequate. If the Company's cash requirements exceed current expectations, the Company reserves the right to raise additional equity or debt capital, beyond what is being sought with current efforts. There can be no assurance that adequate additional financing on acceptable terms will be available when needed. The unavailability of sufficient financing when needed would have a material adverse effect on the Company, could require the Company to terminate its operations, and Investors could lose all, or a significant portion of, their investment. Additionally, any new financing that might hereafter be issued by the Company may carry certain rights and privileges senior to those of the Investors in C-1 Investment Certificates and may negatively impact the Investors in C-1 Investment Certificates.
Existing and potential litigation
Although management is unaware of any threatened or pending litigation against the Company or management, there can be no assurance that future claims will not be asserted and that, even if without merit, the cost to defend against such claims would not be significant, thus having a material adverse effect on the Company's business, financial condition and results of operations. The Company has never filed any lawsuit against any other person or entity, or been the subject of a lawsuit.
Control of the Company
The Directors comprising the Company's Cooperative Board will have management authority over the majority of the operations of the Company, regardless of the opposition of Investors to pursue an alternate course of action. Investors will have limited rights to vote with respect to the management and limited ability to participate in many decisions regarding management of the Company's business. In addition, Investors should be aware that the Cooperative Board has the sole authority to enter into transactions with related parties that could increase the indebtedness of the Company or create conflicts of interest associated with the operations of the Company, which could have a materially adverse affect on the Company’s operations.
The Company is obligated to indemnify its management
Directors of the Company owe certain duties to the Company they serve in connection with the use of its assets. Directors are fiduciaries, and as such are under obligations of trust and confidence to the Company and owners to act in good faith and for the interest of the Company and its owners, with due care and diligence. Notwithstanding the foregoing, the Company is obligated to indemnify Directors of the Company for actions or omissions to act by such Directors of the Company on behalf of the Company that are authorized under the organizational documents of the Company. There are very limited circumstances under which the Directors of the Company can be held liable to the Company. Accordingly, it may be very difficult for the Company or any Investor to pursue any form of action against the management of the Company.
Limited ability to protect intellectual property rights
The Company has not applied for, and has no plans to apply for, intellectual property protection through trademarks or patents. Existing trademarks have been issued for the name 'Commongrounds' for real-estate related purposes. For this reason or others, the Company may become subject to third-party claims that it infringed upon their proprietary rights or trademarks. Such claims, whether or not meritorious, may result in the expenditure of significant financial and managerial resources, injunctions against the Company or the payment of damages by the Company.
No audited financial statements
The Company has not yet sought to have its financial information audited by an independent certified public accountant and there is no assurance that it will do so in the future. All financial information provided in the Offering Materials has been prepared by the Company's management team and has not been reviewed or compiled by an independent accounting firm.
The Company may not obtain sufficient insurance coverage
The cost of insurance policies maintained by the Company to protect the Company's business and assets could increase in the future. In addition, some types of losses, such as losses resulting from natural disasters, generally are not insured because they are uninsurable or it is not economically practical to obtain insurance to cover them. Moreover, insurers recently have become more reluctant to insure against these types of events. Should an uninsured loss or a loss in excess of insured limits occur, this could have a material adverse effect on the Company's business, results of operations and financial condition.
Need for additional financing
The Company is looking to raise $11,735,864 in additional equity, long-term debt and grant financing for the Project outside of this Offering. If the Company's gross proceeds from this Offering and other financing sources do not cover estimated Project costs, completion of the Project may be delayed indefinitely, jeopardizing the Company's ability to make distributions to Investors.
Dependence on a single income producing asset
The Project is expected to be, for the foreseeable future, the Company's only asset. As a result, the Company will not have diversified sources of revenue. The prospects of the Company depend upon the Project maintaining its occupancy, rental, and resale value or increasing in such value. The typical risks relating to an investment in real estate will apply to the Project and its ability to meet debt service obligations. These include, but are not limited to:
- Changes in the general economic climate and market conditions of the United States and Indianapolis, Indiana;
- Changes in the occupancy or rental rates of the Project;
- A failure to lease the Project in accordance with the projected leasing schedule;
- Limited availability of mortgage funds or fluctuations in interest rates which may render the sale and refinancing of the Project difficult;
- Unanticipated increases in real estate taxes and other operating expenses;
- Competition from other similar housing and commercial properties;
- Environmental considerations;
- Zoning laws and other governmental rules and policies; and
- Uninsured losses including possible acts of terrorism or natural disasters.
Due to the lack of diversification, any one or more of the preceding factors could materially adversely affect the value of the Project. If the value of the Project were to decrease and the Company were to choose to sell the Project, liquidate and distribute its remaining assets after paying creditors, Investors might not recover the amount of their investment, if Investors were to receive any funds at all.
Dependence on rental income
The Company's income and operating results may vary significantly from projected amounts and fluctuate substantially from month to month due to several factors, many of which are likely to be outside of the Company's control. These factors, each of which could adversely affect results of operations, include:
- Unexpected expenditures for development, construction and other expenses;
- Lease price reductions by the Company, regulations or its competitors or changes in how rent is priced;
- Actual leasing income could be lower than projected rental income due to lower than expected rental demand;
- A Tenant may terminate a lease early;
- Collection of rent may occur in a subsequent year than the year projected due to the requirement or the failure of a Tenant to make rent payments when due;
- Actual expenses could be in excess of projected expenses;
- Changes in the demand for or supply of competitive properties;
- Environmental controls and other governmentally imposed restrictions;
- Changes in state or local tax rates and assessments;
- Changes in general or local economic conditions and acts of God or other calamities;
- The Company's ability to attract, train and retain qualified personnel;
- Change in federal or state laws and regulations;
- Timing and number of strategic relationships that are established;
- Loss of key business partners.
Any projections of the Company's future operating costs will be based upon assumptions as to future events and conditions, which the Company believes to be reasonable, but which are inherently uncertain and unpredictable. The Company's assumptions may prove to be incomplete or incorrect and unanticipated events and circumstances may occur. Due to these uncertainties and the other risks outlined in this section, the actual results of the Company's future operations can be expected to be different from those projected and such differences may have a material adverse effect on the Company's prospects, business or financial condition.
Any projections that prepared or provided by the Company will not be prepared with a view toward public disclosure or complying with the published guidelines of the American Institute of Certified Public Accountants or the Securities Exchange Commission regarding projected financial information. Under no circumstances should such information be construed to represent or predict that the Company is likely to achieve any particular results. The cautionary statements made should be read as being applicable to all related forward-looking statements wherever they appear.
No operating history
The Company was formed in March 2018 and has no previous operating history or past financial information. The Company has not generated any income to date. The Project is currently in an early phase of construction and is not generating rental income. Due to the Company's lack of operating history and the development status of the Project, the Company is unable to forecast its income with any assurance of accuracy. Therefore, we cannot provide any assurance that the Company will be able to achieve projected income levels or projected interest payments to Investors.
General real estate industry risks
The Company will be subject to all the risks inherent in developing and investing in real estate assets. A major risk of owning real estate is the possibility that the Project will not generate sufficient rental income or other income to meet expenses, including debt service or other required payments, or will decrease in value. Additional risks may include, without limitation, general and local economic and social conditions, the supply and demand for comparable properties, energy shortages and costs, declines in neighborhood property values, changes in tax, zoning, building, environmental and other applicable laws, real property tax rates, changes in interest rates and the availability of mortgage funds which may render the sale of properties difficult or unattractive. Such risks also include fluctuations in operating expenses, which could adversely affect the ability of the Company to meet debt service obligations. These risks could result in substantial unanticipated delays or expenses and, under certain circumstances, could prevent completion of development activities once undertaken, any of which could have an adverse effect on the Company.
Federal, state and local laws may impose liability on a property owner for releases, or the otherwise improper presence on the premises, of hazardous substances without regard to fault or knowledge of the presence of such substances. A property owner may be held liable for environmental releases of such substances that occurred before it acquired title and that are not discovered until after it sells the Property. Although the Company has had an environmental assessment of the Property performed, if any hazardous substances are found at any time on or around the Property, the Company may be held liable for all cleanup costs, fines, penalties and other costs regardless of whether it owned that Property when the releases occurred or the hazardous substances were discovered. If losses arise from hazardous substance contamination that cannot be recovered from a responsible party, the financial viability of the Project may be substantially affected. In an extreme case, the Project may be rendered worthless, or the Company may be obligated to pay cleanup and other costs in excess of the value of the Project.
Phase I and Phase II environmental assessments have been completed for the property. A Baseline Environmental Assessment was submitted to the Michigan Department of Environmental Quality and Commongrounds is not expected to be held liable for hazardous substances identified and reported in the BEA, pursuant to state and federal environmental laws. Subject to state approval, Commongrounds has been allocated brownfield funding to assist with any environmental cleanup required onsite.
Investments in property requiring substantial construction carry significant risks
Because the Property requires substantial construction, there are additional risks relating to the nature of such construction efforts. Construction risks include, but are not limited to, the timeliness of the project's completion, the integrity of appraisal values, and the length of the ultimate construction process. If construction work is not completed (due to contractor abandonment, unsatisfactory work performance, or various other factors) and all available financing has already been expended, then in the event of a default the Company may in some instances borrow significant additional funds to complete the construction work. Any such investment could potentially require that it be repaid by the Company prior to the Investors receiving any distributions on their investment; in such event, the ability of the Investors to realize a return on their investment would be materially adversely affected. Investments involving properties with such development or significant rehabilitation business plans have an increased risk of failure.
No market; Lack of liquidity
There currently is no public or other trading market for the C-1 Investment Certificates being offered or any other securities of the Company and there can be no assurance that any market may ever exist for the C-1 Investment Certificates being offered or any other securities of the Company. If a public market does develop, factors such as competitors' announcements about performance, failure to meet securities analysts' expectations, changes in laws, government regulatory action, and market conditions for the industry in which the Company operates in general could harm the price of the Company's publicly traded securities. The Company has no obligation to register the C-1 Investment Certificates being offered or any other securities under the Securities Act or any state securities laws. Investors should be prepared to hold their C-1 Investment Certificates for an indefinite period.
Restrictions on transferability
The C-1 Investment Certificates offered by the Company have not been registered under the Securities Act, nor any applicable state securities laws, in reliance on the exemption from registration in Securities Act Section 4(a)(6) and in accordance with Section 4A and Regulation Crowdfunding (§ 227.100 et seq.). As a result, the C-1 Investment Certificates are subject to restrictions on transferability and resale and may not be transferred or resold by any Investor in the C-1 Investment Certificates during the one-year period beginning when the C-1 Investment Certificates were issued, unless the C-1 Investment Certificates are transferred (i) to the Company; (ii) to an Accredited Investor as defined in Rule 501(a) of Regulation D promulgated under the Securities Act; (iii) as part of an offering registered with the SEC; or (iv) to a member of the family of the Investor or the equivalent, to a trust controlled by the Investor, to a trust created for the benefit of a member of the family of the Investor or the equivalent, or in connection with the death or divorce of the Investor or other similar circumstance. The term “member of the family of the Investor or the equivalent” includes a child, stepchild, grandchild, parent, stepparent, grandparent, spouse or spousal equivalent, sibling, mother-in-law, father-in-law, son-in-law, daughter-in-law, brother-in-law, or sister-in-law of the Investor, and includes adoptive relationships. The term “spousal equivalent” means a cohabitant occupying a relationship generally equivalent to that of a spouse. In addition, there is no market for the C-1 Investment Certificates being offered and the Company does not expect that any market will be developed in the foreseeable future.
Investors may not receive a return of their investment amounts and there is no guarantee of return
Investors will be entitled to receive a return on their investment only through the C-1 Investment Certificates . The only source of funds for the repayment of the Investors' investment amounts and a return on such investment amounts is the Company's operations. The return to Investors and the future value of the investment will depend on a number of factors which cannot be predicted at this time and which may be beyond the control of the Company. These include the general, local, and industry-related economic conditions. In the event that the Company does not generate sufficient revenues from operations, the Investors may not receive any return at all and may lose a substantial portion (or possibly all) of their investment amounts. Neither the Company nor the Placement Agent makes any representations or warranties with respect to any return on an investment in the Company. There can be no assurance that an Investor will receive any return on an investment in the Company or realize any profits on such Investor's investment in the Company.
The Company anticipates borrowing additional debt senior to the C-1 Investment Certificates
The Company plans to secure a senior bank loan from 4Front Credit Union of up to $8,700,000 (the "Senior Lender", and the "Senior Loan", respectively), which imposes certain conditions on the Company. Any Senior Loan documents will likely contain various representations, covenants (affirmative and negative) and other provisions. Such restrictions, while relatively common in today's real estate financing market, increase the risks of an investment in the Company. If the Company fails to satisfy the covenants, the Senior Lender may declare the Senior Loan in default, in which case, Investors could lose their entire investment in the Company.
Additionally, the Company has issued a class of equity securities with rights and return provisions senior to those being issued to the Investors in this Offering. In the event that the Company does not generate sufficient revenues from operations, or otherwise has insufficient capital to fund the return provisions of the senior equity securities and the C-1 Investment Certificates, Investors may receive a limited return or no return at all.
Purchase price of the C-1 Investment Certificates may not reflect the value of the C-1 Investment Certificates
The offering price of the C-1 Investment Certificates has been established by the Manager of the Company and is not necessarily indicative of the value of the C-1 Investment Certificates or the Company's asset value, net worth, or other criteria of value. There can be no assurance that this price accurately reflects the current value of the C-1 Investment Certificates.
Investor's ability to withdraw their capital contributions is limited
Investors may not withdraw their capital contributions, except as provided for under the C-1 Investment Certificates, which is contingent upon the Company having means to refinance the withdrawn capital. Otherwise, Investors will be entitled to receive a return of their capital contributions only through distributions in accordance with the C-1 Investment Certificate. The only source of funds for the repayment of Investors' capital contributions is the Company's operations. In the event that Company does not generate sufficient cash flow from operations, or is otherwise unable to refinance, the Investors may not receive a return of their capital contributions.
Investors may be negatively impacted by future offerings, financings, or acquisitions
The issuance or sale of additional C-1 Investment Certificates or other securities of the Company in connection with acquisitions or additional rounds of financing may negatively impact Investors. Subsequent investors may demand and receive terms more favorable than the terms of the C-1 Investment Certificates in this Offering. Please see the Capitalization of the Company section for detail on additional capital raised or to be raised, which may have a negative impact on the C-1 Investment Certificates being offered in this Offering. Since this Company is a non-stock Company, incentive shares cannot be issued and thus do not have an effect on Investors.
General tax considerations
Investors in the C-1 Investment Certificates are urged to consult their tax advisors concerning the federal, state, local and foreign income tax consequences of acquiring, owning, and disposing of, the C-1 Investment Certificates as well as the application of state, local and foreign income and other tax laws. Any federal tax discussion contained in these Offering Materials, including any attachments, was written in connection with the Offering of the C-1 Investment Certificates by the Company, and is not intended or written to be used, by anyone for the purpose of avoiding federal tax penalties that may be imposed by the federal government. Nothing in these Offering Materials shall be deemed tax or legal advice by the Company or its members.
An investment in the C-1 Investment Certificates is speculative and involves a high degree of risk
An investment in the Company should not be made by persons unable to bear the risk of loss of their entire investment or by persons who may have a need for liquidity from their investment. In making an investment decision, you must rely on your examination of the Company and the terms of the Offering, including the merits and the risks involved. Like all investments, an investment in the Company involves the risk of the loss of capital, and the C-1 Investment Certificates should not be purchased by anyone who cannot afford the loss of his, her or its entire investment. Investors must be prepared to bear the economic risk of an investment in the Company for an indefinite period of time and be able to withstand a total loss of their investment. Investors are encouraged to consult their own investment or tax advisors, accountants, legal counsel, or other advisors to determine whether an investment in the C-1 Investment Certificates is appropriate.
The C-1 Investment Certificates have not been registered under the Securities Act
The C-1 Investment Certificates offered by the Company have not been registered under the Securities Act, nor any applicable state securities laws, in reliance on the exemption from registration in Securities Act Section 4(a)(6) and in accordance with Section 4A and Regulation Crowdfunding (§ 227.100 et seq.). The investment contemplated by the C-1 Investment Certificates has not been recommended, approved, or disapproved by the SEC, or any state securities commission, or other regulatory authority, nor have any of these authorities passed upon or endorsed the merits of this Offering or the accuracy, completeness, or adequacy of the Offering Materials. Any representation to the contrary is a criminal offense.
Investors will be subject to certain suitability requirements
The C-1 Investment Certificates will not be sold to an Investor until such Investor delivers an executed representation, as contained in the Qualified Investor Questionnaire and Subscription Agreement, that he, she or it is a Qualified Investor and meets certain standards. Persons who are not Qualified Investors are not permitted to invest. The fact that a person is a Qualified Investor represents the minimum suitability requirement for an Investor, and compliance with such standards does not necessarily indicate that this would be a suitable investment for such person.
There is no market for the C-1 Investment Certificates and no such market is expected to develop
The C-1 Investment Certificates are subject to restrictions on transferability and resale and may not be transferred or resold by any Investor in the C-1 Investment Certificates during the one-year period beginning when the C-1 Investment Certificates were issued, unless the C-1 Investment Certificates are transferred (i) to the Company; (ii) to an Accredited Investor as defined in Rule 501(a) of Regulation D promulgated under the Securities Act; (iii) as part of an offering registered with the SEC; or (iv) to a member of the family of the Investor or the equivalent, to a trust controlled by the Investor, to a trust created for the benefit of a member of the family of the Investor or the equivalent, or in connection with the death or divorce of the Investor or other similar circumstance. The term “member of the family of the Investor or the equivalent” includes a child, stepchild, grandchild, parent, stepparent, grandparent, spouse or spousal equivalent, sibling, mother-in-law, father-in-law, son-in-law, daughter-in-law, brother-in-law, or sister-in-law of the Investor, and includes adoptive relationships. The term “spousal equivalent” means a cohabitant occupying a relationship generally equivalent to that of a spouse. Investors may be required to bear the financial risks of the investment in the Company for an indefinite period of time. Persons who desire liquidity from this investment should not invest.
The Company will have the right to refuse any subscription in its sole discretion
The Company will have the right to refuse any subscription in its sole discretion and for any reason (or no reason), including the Company’s belief that an Investor does not meet the applicable suitability requirements or that exemptions from the registration requirements of any applicable jurisdiction are not available with respect to the issuance of the C-1 Investment Certificates to any Investor under this Offering. The Company may make or cause to be made such further inquiry and obtain such additional information as it deems appropriate with regard to the suitability of Investors. The Company reserves the right to modify the suitability standards with respect to certain Investors in order to comply with any applicable state or local laws, rules, regulations or otherwise.
The information presented in the Offering Materials was prepared by the Company and contains "forward-looking" statements
The Offering Materials (together with any amendments or supplements and any other information that may be furnished by the Company) includes or may include certain forward-looking statements, estimates, and projections with respect to the Company's anticipated future performance. Examples of forward-looking statements include statements regarding the Company's future sales, purchase orders, financial results, operating results, acquisitions, business and monetization strategies, projected costs, revenues, products, competitive positions and plans and objectives of management for future operations. In some cases, forward-looking statements can be identified by terminology such as "may," "will," "should," "would," "expects," "plans," "anticipates," "believes," "estimates," "predicts," "potential," "continue," or the negative of these terms or other comparable terminology. Such forward-looking statements, estimates, and projections are not guarantees of future performance and reflect various assumptions of the Company's management that may or may not prove correct and involve various risks and uncertainties over which the Company may have no influence or control. No independent party has verified or confirmed the reasonableness of the assumptions that form the basis of the forecasts. These and many other factors could affect the Company's future financial and operating results, and could cause actual results to differ materially from expectations based on forward-looking statements made in the Offering Materials or elsewhere by the Company (or on its behalf). The likelihood of the Company's success must be considered in light of the problems, expenses, difficulties, complications, and delays frequently encountered in connection with a new real estate development. There can be no assurance that the Company will generate any particular level of revenue or will be able to continue to operate profitably. The Placement Agent expressly disclaims any representation or warranty regarding involvement in or responsibility for any forward looking statements contained in the Offering Materials.
Only the Offering Materials may be relied upon in connection with this Offering
Only the information expressly set forth in the Offering Materials or contained in documents furnished by the Company upon request may be relied upon in connection with this Offering. No person has been authorized to give any information or to make any representations other than those contained in the Offering Materials and, if given or made, such information or representations must not be relied upon. Access to the Offering Materials at this time does not imply that information therein is correct as of any time subsequent to this date.
The Offering Materials do not purport to be all-inclusive
The Offering Materials provided to Investors do not purport to be all-inclusive or contain all of the information that you may desire in investigating the Company. You must rely on your own examination of the Company and the terms of the Offering, including the merits and risks involved in making an investment in the C-1 Investment Certificates. Prior to making an investment decision, you should consult your own counsel, accountants, and other advisors and carefully review and consider all of the Offering Materials provided and the other information that you acquire. You should not construe any statements made in the Offering Materials provided as investment, tax or legal advice.
The Company reserves the right to reject some or all of any prospective investment
The offer of the C-1 Investment Certificates by the Company is subject to prior sale and certain other conditions. The Company reserves the right, in the Company's sole discretion and for any reason, to withdraw, cancel, or modify the Offering and to accept or reject some or all of any prospective investment. The Company will have no liability to any Investor in the event that the Company takes any of these actions.
The terms, conditions and restrictions of the C-1 Investment Certificates are fully set forth in the Operating Agreement
The terms, conditions and restrictions of the C-1 Investment Certificates are fully set forth in the Membership Agreement, which you will be required to execute if you decide to invest, the form of which has been provided to you in the Offering Materials section for this Offering on the Company Offering Profile. You should not invest unless you have completely and thoroughly reviewed the provisions of the Membership Agreement. In the event that any of the terms, conditions, or other provisions of the Membership Agreement are inconsistent with or contrary to the information provided in the Offering Materials, that agreement will control. Any additional information or representations given or made by the Company in connection with the Offering, whether oral or written, are qualified in their entirety by the information set forth in the Offering Materials, including, but not limited to, the risks of investment.
No solicitation in any state or other jurisdiction in which such solicitation is not authorized
The Offering Materials do not constitute an offer to sell, or a solicitation of an offer to buy, any security in any state or other jurisdiction in which such an offer or solicitation is not authorized. Except as otherwise indicated, the offering materials speak as of the date the Offering was initiated. Neither access to the Offering Materials nor any sale of the C-1 Investment Certificates shall, under any circumstances, create an implication that there has been no change in the Company's affairs from the date the Offering was initiated.
Each investment is subject to the terms and conditions of the Investor Registration Agreement
Each Investor's subscription for and purchase of the C-1 Investment Certificates is governed by, and subject to, the terms and conditions of the Investor Registration Agreement entered into between the Placement Agent and such Investor, including, without limitation, the investment limits established by the Placement Agent for such Investor, the Placement Agent's rights to terminate the offering or any Investor's registration with the Placement Agent.
The Company will be available to you to answer questions and furnish additional information
The Company will make available to you, within a reasonable amount of time upon receiving a request, at reasonable times and in the manner determined by the Company, copies of material agreements and other documents relating to the Company and will afford you the opportunity to ask questions and receive answers from the Company concerning its business and financial condition. The Company will also provide you an opportunity to meet with representatives of the Company to obtain other additional information.
Securities laws being utilized and investor qualifications
This Offering is made in reliance upon an exemption from registration under 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 (§ 227.100 et seq.). Regulation Crowdfunding sets forth certain statutory investment limitations for purchasers of securities offered pursuant thereto. The C-1 Investment Certificates will be offered and sold only to persons whose investment in the C-1 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: (i) the greater of $2,200 or 5 percent of the lesser of the investor’s annual income or net worth if either the investor’s annual income or net worth is less than $107,000; or (ii) 10 percent of the lesser of the investor’s annual income or net worth, not to exceed an amount sold of $107,000, if both the investor’s annual income and net worth are equal to or more than $107,000 ((i) and (ii) collectively referred to as the "Qualified Investors"). The minimum investment that will be accepted by the Company from a Qualified Investor is $500.
Subscribing for an investment and transferring funds
Investors interested in subscribing for the C-1 Investment Certificates will be required to complete and return to the Company the Subscription Documents, as described herein. Payment of the investment amount is preferred via electronic ACH transfer, but may also be made by check or domestic wire. Instructions for each method of payment will be provided upon investment via the Company Offering Profile.
Fees for placement agent services
As compensation for Localstake Marketplace LLC’s services in connection with the Offering, Localstake Marketplace LLC shall be entitled to receive a placement fee paid by the Company (the "Placement Fee"). Below is a breakdown of the Gross Proceeds, estimated Placement Fee and Net Proceeds for the Offering.For Minimum Offering Amount
- Gross Proceeds: $250,000
- Estimated Placement Fee: $8,500
- Net Proceeds: $241,500
- Gross Proceeds: $1,070,000
- Estimated Placement Fee: $41,300
- Net Proceeds: $1,028,700
Ongoing reporting requirements
In addition to the Information Rights provided to investors under the C-1 Investment Certificates, the Company will file a report electronically with the SEC annually and post the report on its website, no later than 120 days after the end of each fiscal year covered by the report. Once posted, the annual report may be found on the Company’s website at: http://www.commongrounds.coop//investor_reports
The Company must continue to comply with the ongoing reporting requirements until:
1. the Company is required to file reports under Section 13(a) or Section 15(d) of the Exchange Act;
2. the Company has filed at least one annual report pursuant to Regulation Crowdfunding and has fewer than 300 holders of record and has total assets that do not exceed $10,000,000;
3. the Company has filed at least three annual reports pursuant to Regulation Crowdfunding;
4. the Company or another party repurchases all of the C-1 Investment Certificates issued in this Offering; or
5. the Company liquidates or dissolves its business in accordance with state law.
Material changes to the Offering
Should a material change be made by the Company to the Offering Materials, including, but not limited to a change to the Termination Date or Minimum Offering Amount, the Company will provide to all Investors who have made investment commitments notice of the material change. If the Investor does not reconfirm his or her investment commitment within five (5) business days of receipt of such notice, the Investor’s investment commitment will be cancelled and the Investor will receive a notification verifying that the investment commitment was cancelled, the reason for the cancellation and the refund amount that the Investor should expect to receive. The Escrow Agent will initiate a return of the Investor’s funds deposited in the Escrow Account to such Investor within ten (10) business days.
Securities to be offered to investors
Closing procedures for the Offering
The Offering shall be available to potential Investors until the final closing of the sale and purchase of the C-1 Investment Certificates (the "Final Closing"), which will occur upon the earlier of (i) the date the Company has closed on the purchase and sale of C-1 Investment Certificates for the Maximum Offering Amount, (ii) December 31st, 2019 at 11:59 PM EST, or (iii) the Company terminates the Offering in its sole and absolute discretion (the "Termination Date").
The C-1 Investment Certificates are offered by the Company on a best efforts, minimum-maximum basis as specified herein. As such, the Offering is contingent upon the Company's receipt of the Minimum Offering Amount, prior to the Termination Date. All funds received from Investors will be held in an escrow account (the "Escrow Account") established with Kingdom Trust Company (the "Escrow Agent") until the Minimum Offering Amount has been satisfied. Once the Minimum Offering Amount has been received by the Escrow Agent in the Escrow Account, pursuant to the terms of the Escrow Agreement and provided that i) the Company has provided advance written notice to Investors of at least five (5) business days, ii) the Offering has been available on the Company Offering Profile for a minimum of twenty-one (21) days, iii) there has been no material change that would require an extension of the Offering and reconfirmation of the investment commitment, and iv) the Escrow Account continues to meet the Minimum Offering Amount at the end of the five business day period after Investors have been notified of the closing, the Escrow Agent will initiate the transfer of Investor funds (net of the placement fee to be paid to the placement agent, Localstake Marketplace LLC (the "Placement Agent"), on such amounts) from the Escrow Account to a deposit account maintained by the Company (the "Initial Closing"), which funds shall constitute net proceeds usable by the Company for the purposes outlined in the Offering Materials. After the Initial Closing, additional Investor funds will be held in the Escrow Account until, and at such time as, the Placement Agent chooses to, in its sole discretion, direct the Escrow Agent to release the additional Investor funds, (each a "Closing"), to be facilitated using the same procedures identified herein for the Initial Closing. The Company will continue to accept investment commitments up until the occurrence of the Final Closing.
If the Minimum Offering Amount has not been received by the Company into the Escrow Account prior to the Termination Date of the Offering, no C-1 Investment Certificates will be sold in the Offering, and the Offering will not be consummated. All investment commitments will be cancelled and the Escrow Agent will initiate a return of any Investor funds deposited in the Escrow Account to such Investors within ten (10) business days. Investor funds will not earn interest while in escrow and no interest will be returned with Investor funds if the Offering is not consummated. Any C-1 Investment Certificates subscribed for by control persons of the Company or the Placement Agent (or their affiliates or related persons thereof) will not be counted in determining whether the Minimum Offering Amount has been satisfied.
Use of proceeds in the Offering
The Company intends to use the net proceeds of this Offering for location buildout and paying down existing debt, as explained in further detail on the Funding tab of the Company Offering Profile.
The Company's acceptance of investments and cancellations
The Company reserves the right to accept, through execution of a countersignature on the Subscription Documents, an Investor’s subscription for C-1 Investment Certificates at any time prior to the Termination Date of the Offering and may reject the Subscription Documents based upon the Company’s review thereof for any reason or for no reason. Should the Company receive investment commitments for greater than the Maximum Offering Amount, the Company will determine, in its sole discretion, which subscriptions to accept up to the Maximum Offering Amount.
If the Investor has chosen to transfer their investment funds electronically, these funds will be transferred from their linked bank account as specified on the Company Offering Profile to the Escrow Account, forty-eight (48) hours after the Company’s acceptance thereof. If the Investor has chosen another form of funds transfer, the Investor will receive a notice containing instructions for transferring funds to the Escrow Account. Investors may cancel their investment commitment in the C-1 Investment Certificates, using the methods made available on the Company Offering Profile, and have their investment funds returned (if applicable) for any reason prior to up to forty-eight (48) hours after the Closing applicable to the Investor’s investment. If an Investor has not canceled his, her or its investment commitment in the C-1 Investment Certificates prior to such deadline, the Investor’s subscription for the C-1 Investment Certificates shall be irrevocable by the Investor, and will be documented through the receipt of an executed copy of the C-1 Investment Certificates, which will also be recorded and maintained on the books of the Company. The Company does not intend to employ the services of a transfer agent.
Fundraise status: No current fundraise
You cannot express interest at this time. Check back soon!
Your status: No interest
Expressing Interest FAQ
Expressing interest covers a few different functions. First, it acts as your indication to the business that you have a potential interest in considering an investment. It is also the means by which you are able to access additional materials from the business. The reason you must express interest to view this information is so that the business can keep track of who has accessed their sometimes confidential information. Lastly, expressing interest allows you to keep in touch and stay updated on the progress of the business as they work through their fundraise.
An expression of interest is non-binding. Providing a dollar amount of interest to the business is exclusively a way for them to get a better understanding of whether there is sufficient aggregate interest from investors to support their fundraise goals. If you do not provide a dollar amount to the business, this is fine, but they may decide to cancel their fundraise if they do not have a clear enough picture as to whether there is enough interest to meet their goals.
Yes. Interest can be cancelled at any time, and after cancelling the business will have no means by which to contact you. If you cancel your interest, you can always express interest again if you change your mind.
Yes. The business will be able to contact you through Localstake Marketplace platform messaging. They will not receive any other personal contact information (i.e. email address, phone number, etc.).
When you express interest in a business, they will receive a notification that you are interested. On their investor management interface, they will see your name, state of residence, occupation, and amount of investment.
Once you've indicated interest, you can commit to invest.
Committing to Invest FAQ
Committing to invest should constitute a binding commitment on the part of the investor that you are going to follow through on investing the amount you have provided to the business. You should only commit to invest once you are sure that you want to invest in the opportunity.
Your commitment will make you eligible to receive any perks available to investors for which you meet applicable eligibility requirements. Note that you are not guaranteed a spot in the fundraise until the business has approved your investment. Once you have committed and the business has finalized their investment terms, you can continue on to complete your investment and submit it to the business for approval.
A commitment shoud be treated as binding. If you do not plan to move forward with an investment, you should not commit to doing so. However, you are not irrevocably committed to investing until 3 days after the business has approved your investment and countersigned your investment documents.
You can commit to invest at any time. Commitments help show traction in the fundraise to other investors, so the earlier you are ready to make your commitment, the better. This will help the business in its efforts to attract additional investors to their fundraise.
The business owners are the only people that will have this information. No other investors will know that you committed to invest, only that someone committed to invest. The aggregate amount of commitments is shared with other interested investors.
No. You will still need to provide an electronic signature on the investment documents and select a method to transfer your funds. You will need to wait to complete these steps until the business has finalized their investment terms.
Once you have committed to invest, you will review and sign the investment documents.
Signing Documents FAQ
When you make an investment in a business, you enter into legally binding contract that outlines your rights as an investor. The specific documents you sign will vary based upon the type of security you are investing in (i.e. debt or equity). Every investment will include an investor questionnaire document that will be pre-populated with information from your investment account that provides proof of your eligibility to invest in the offering. These documents act as your proof of investment and provide all of the details about your investment and your role as an investor. You should read these documents carefully before investing.
Your investment documents will be pre-populated with information from your investment account to help identify you, including your SSN which the business needs in order to produce tax documents for your investment. There will also be information about your personal financial situation on the documents to help provide proof of your eligibility to invest in the offering.
In order to sign the documents, you will use our proprietary e-signature tool. You will have the opportunity to review each document that you will be signing and then select a signature or create your own to be added to the documents.
Yes, once the business has accepted your investment and countersigned your investment documents, a copy of your signed agreement will be stored on your Investment Portfolio page on Localstake Marketplace.
We can help you complete an investment for the following investor types: self-directed IRA, joint with spouse, entities, and trusts. Contact us if you would like to make an investment of a type other than as an individual.
Once you have reviewed and signed investment documents, you will choose how you would like to transfer funds.
Transferring Funds FAQ
The business owner will then receive your proposed investment and accept and countersign it.
The business will wait to accept your investment until their funding target has been reached.
For most fundraises, there are three options to choose from when transferring investment funds.
- 1. Electronic Transfer - transfer your funds by electronic ACH transfer. You will need to connect a personal bank account in order to use this transfer method.
- 2. Wire Transfer - call your bank and give them instructions on where you would like your investment funds to be sent. With a wire transfer, you will receive instructions on where to transfer the funds after the business accepts your investment.
- 3. Check - When selecting to make your investment by check, you will receive instructions on where to mail your check after the business accepts your investment.
Note that, due to difficulty in tracking funds, the option to mail a check is typically only available for investment amounts of $5,000 or greater, and in some cases may not be available at all.
Fund transfers do not occur until the business has accepted your investment and the funding target has been reached.
Fund transfers do not occur until the business has accepted your investment and the funding target has been reached.
If you transfer your funds via electronic transfer, the funds will be transferred from your bank account as soon as the business reaches their fundraise target and accepts your investment. You will receive a notice two business days prior to the electronic transfer occurring. If you transfer funds via check or wire, you will need to complete the fund transfer outside of the Localstake Marketplace platform.
Your funds will be held in an escrow account at a bank until the business reaches their fundraise target. Consult the offering materials for more details on the escrow arrangement. If the business does not reach their funding goal, the funds will be returned to you by the escrow agent.
If you would like to change something about your investment, such as the information on your investment documents, or to decrease the amount of your investment, please contact us. If you only wish to increase the amount of your investment, you can make a second investment by clicking the 'Invest Again' button.
Investors may cancel an investment commitment until 48 hours prior to the deadline identified in the offering materials. Localstake Marketplace will notify investors when the target offering amount has been met. If the issuer reaches the target offering amount prior to the deadline identified in the offering materials, it may close the offering early if it provides notice about the new offering deadline at least five business days prior to 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 prior to the offering deadline, the funds will be released to the issuer upon closing of the offering and the investor will receive securities in exchange for his or her investment.
If an investor does not reconfirm his or her investment commitment after a material change is made to the offering, the investor’s investment commitment will be cancelled and the committed funds will be returned.
Businesses send payments to investors over the Localstake Marketplace platform
If the business you invest in reaches their funding goal, they will be making payments to you over the Localstake Marketplace platform. If you use electronic transfer for your investment, these payments will be made back to the bank account you linked for your electronic transfer. If you do not set up an electronic transfer for your initial investment, you may do so on your bank account page once you log in.
If the business you invest in does not reach their funding goal, your investment funds will be returned to you. The escrow agent for the fundraise will return the funds to you typically via check or ACH.