diff --git a/app/src/main/java/com/x8bit/bitwarden/ui/vault/feature/vault/util/VaultDataExtensions.kt b/app/src/main/java/com/x8bit/bitwarden/ui/vault/feature/vault/util/VaultDataExtensions.kt
index 7949949423..cd881dd360 100644
--- a/app/src/main/java/com/x8bit/bitwarden/ui/vault/feature/vault/util/VaultDataExtensions.kt
+++ b/app/src/main/java/com/x8bit/bitwarden/ui/vault/feature/vault/util/VaultDataExtensions.kt
@@ -67,6 +67,8 @@ fun VaultData.toViewState(
         VaultState.ViewState.NoItems
     } else {
         val totpItems = filteredCipherViewList.filter { it.login?.totp != null }
+        val shouldShowUnGroupedItems = filteredCollectionViewList.isEmpty() &&
+            noFolderItems.size < NO_FOLDER_ITEM_THRESHOLD
         VaultState.ViewState.Content(
             itemTypesCount = itemTypesCount,
             totpItemsCount = if (isPremium) {
@@ -103,7 +105,7 @@ fun VaultData.toViewState(
                     )
                 }
                 .let { folderItems ->
-                    if (noFolderItems.size < NO_FOLDER_ITEM_THRESHOLD) {
+                    if (shouldShowUnGroupedItems) {
                         folderItems
                     } else {
                         folderItems.plus(
@@ -124,7 +126,7 @@ fun VaultData.toViewState(
                         isPremiumUser = isPremium,
                     )
                 }
-                .takeIf { it.size < NO_FOLDER_ITEM_THRESHOLD }
+                .takeIf { shouldShowUnGroupedItems }
                 .orEmpty(),
             collectionItems = filteredCollectionViewList
                 .filter { it.id != null }
diff --git a/app/src/test/java/com/x8bit/bitwarden/ui/vault/feature/vault/VaultViewModelTest.kt b/app/src/test/java/com/x8bit/bitwarden/ui/vault/feature/vault/VaultViewModelTest.kt
index 4e76f03616..7a654526a2 100644
--- a/app/src/test/java/com/x8bit/bitwarden/ui/vault/feature/vault/VaultViewModelTest.kt
+++ b/app/src/test/java/com/x8bit/bitwarden/ui/vault/feature/vault/VaultViewModelTest.kt
@@ -672,6 +672,11 @@ class VaultViewModelTest : BaseViewModelTest() {
                             name = "mockName-5".asText(),
                             itemCount = 1,
                         ),
+                        VaultState.ViewState.FolderItem(
+                            id = null,
+                            name = R.string.folder_none.asText(),
+                            itemCount = 0,
+                        ),
                     ),
                     collectionItems = listOf(
                         VaultState.ViewState.CollectionItem(
@@ -830,6 +835,11 @@ class VaultViewModelTest : BaseViewModelTest() {
                             name = "mockName-1".asText(),
                             itemCount = 1,
                         ),
+                        VaultState.ViewState.FolderItem(
+                            id = null,
+                            name = R.string.folder_none.asText(),
+                            itemCount = 0,
+                        ),
                     ),
                     collectionItems = listOf(
                         VaultState.ViewState.CollectionItem(
@@ -930,6 +940,11 @@ class VaultViewModelTest : BaseViewModelTest() {
                                 name = "mockName-1".asText(),
                                 itemCount = 1,
                             ),
+                            VaultState.ViewState.FolderItem(
+                                id = null,
+                                name = R.string.folder_none.asText(),
+                                itemCount = 0,
+                            ),
                         ),
                         collectionItems = listOf(
                             VaultState.ViewState.CollectionItem(
@@ -1028,6 +1043,11 @@ class VaultViewModelTest : BaseViewModelTest() {
                                 name = "mockName-1".asText(),
                                 itemCount = 1,
                             ),
+                            VaultState.ViewState.FolderItem(
+                                id = null,
+                                name = R.string.folder_none.asText(),
+                                itemCount = 0,
+                            ),
                         ),
                         collectionItems = listOf(
                             VaultState.ViewState.CollectionItem(
diff --git a/app/src/test/java/com/x8bit/bitwarden/ui/vault/feature/vault/util/VaultDataExtensionsTest.kt b/app/src/test/java/com/x8bit/bitwarden/ui/vault/feature/vault/util/VaultDataExtensionsTest.kt
index 482204bda3..09922ba468 100644
--- a/app/src/test/java/com/x8bit/bitwarden/ui/vault/feature/vault/util/VaultDataExtensionsTest.kt
+++ b/app/src/test/java/com/x8bit/bitwarden/ui/vault/feature/vault/util/VaultDataExtensionsTest.kt
@@ -19,6 +19,8 @@ import com.x8bit.bitwarden.ui.platform.base.util.asText
 import com.x8bit.bitwarden.ui.platform.components.model.IconData
 import com.x8bit.bitwarden.ui.platform.components.model.IconRes
 import com.x8bit.bitwarden.ui.vault.feature.itemlisting.model.ListingItemOverflowAction
+import com.x8bit.bitwarden.ui.vault.feature.util.toLabelIcons
+import com.x8bit.bitwarden.ui.vault.feature.util.toOverflowActions
 import com.x8bit.bitwarden.ui.vault.feature.vault.VaultState
 import com.x8bit.bitwarden.ui.vault.feature.vault.model.VaultFilterType
 import io.mockk.every
@@ -86,8 +88,12 @@ class VaultDataExtensionsTest {
                         name = "Folder".asText(),
                         itemCount = 0,
                     ),
-
+                    VaultState.ViewState.FolderItem(
+                        id = null,
+                        name = R.string.folder_none.asText(),
+                        itemCount = 0,
                     ),
+                ),
                 collectionItems = listOf(
                     VaultState.ViewState.CollectionItem(
                         id = "mockId-1",
@@ -194,6 +200,11 @@ class VaultDataExtensionsTest {
                         name = "mockName-1".asText(),
                         itemCount = 1,
                     ),
+                    VaultState.ViewState.FolderItem(
+                        id = null,
+                        name = R.string.folder_none.asText(),
+                        itemCount = 0,
+                    ),
                 ),
                 collectionItems = listOf(
                     VaultState.ViewState.CollectionItem(
@@ -719,6 +730,66 @@ class VaultDataExtensionsTest {
         unmockkStatic(Uri::class)
     }
 
+    @Suppress("MaxLineLength")
+    @Test
+    fun `toViewState with under 100 no folder items and no collections should not show no folder option`() {
+        mockkStatic(Uri::class)
+        val uriMock = mockk<Uri>()
+        every { Uri.parse(any()) } returns uriMock
+        every { uriMock.host } returns "www.mockuri1.com"
+        val mockCipher = createMockCipherView(number = 1, folderId = null)
+        val vaultData = VaultData(
+            cipherViewList = listOf(mockCipher),
+            collectionViewList = listOf(),
+            folderViewList = listOf(),
+            sendViewList = listOf(),
+        )
+
+        val actual = vaultData.toViewState(
+            isPremium = true,
+            isIconLoadingDisabled = false,
+            baseIconUrl = Environment.Us.environmentUrlData.baseIconUrl,
+            vaultFilterType = VaultFilterType.AllVaults,
+            hasMasterPassword = true,
+        )
+
+        assertEquals(
+            VaultState.ViewState.Content(
+                loginItemsCount = 1,
+                cardItemsCount = 0,
+                identityItemsCount = 0,
+                secureNoteItemsCount = 0,
+                favoriteItems = listOf(),
+                folderItems = listOf(),
+                collectionItems = listOf(),
+                noFolderItems = listOf(
+                    VaultState.ViewState.VaultItem.Login(
+                        id = "mockId-1",
+                        name = mockCipher.name.asText(),
+                        startIcon = IconData.Network(
+                            uri = "https://vault.bitwarden.com/icons/www.mockuri1.com/icon.png",
+                            fallbackIconRes = R.drawable.ic_globe,
+                        ),
+                        startIconTestTag = "LoginCipherIcon",
+                        extraIconList = mockCipher.toLabelIcons(),
+                        overflowOptions = mockCipher.toOverflowActions(
+                            hasMasterPassword = true,
+                            isPremiumUser = true,
+                        ),
+                        shouldShowMasterPasswordReprompt = false,
+                        username = "mockUsername-1".asText(),
+                    ),
+                ),
+                trashItemsCount = 0,
+                totpItemsCount = 1,
+                itemTypesCount = 5,
+                sshKeyItemsCount = 0,
+            ),
+            actual,
+        )
+        unmockkStatic(Uri::class)
+    }
+
     @Test
     fun `toViewState should properly filter nested items out`() {
         val vaultData = VaultData(
@@ -783,8 +854,12 @@ class VaultDataExtensionsTest {
                         name = "Folder".asText(),
                         itemCount = 0,
                     ),
-
+                    VaultState.ViewState.FolderItem(
+                        id = null,
+                        name = R.string.folder_none.asText(),
+                        itemCount = 0,
                     ),
+                ),
                 noFolderItems = listOf(),
                 trashItemsCount = 0,
                 totpItemsCount = 1,