Beeline Holdings, Inc.: Form 10-Q for the period ended Jun 30, 2026

Cautionary Note Regarding Forward-Looking Statements

This Report contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, including statements regarding our expectations for prospective future growth, operating results and financial condition, potential future trends and developments within our industry and the U.S. economy generally, expectations and plans with respect to our products and services including the potential market for, timing, features, and demand for such products and services, our expectations and plans for our technology following our acquisition and integration of the remaining outstanding equity interest in MagicBlocks, our planned acquisition of TYTL Corp, Inc. (“TYTL”) and the perceived or potential benefits of such a transaction if it closes, prospective future fractional sale of home real estate transactions, and liquidity and sources of capital. Forward-looking statements are prefaced by words such as “anticipate,” “expect,” “plan,” “could,” “may,” “will,” “should,” “would,” “intend,” “seem,” “potential,” “appear,” “continue,” “future,” believe,” “estimate,” “forecast,” “project,” “designed,” and similar words. We have based these forward-looking statements largely on our current expectations and assumptions regarding events, conditions, and financial trends that may affect our future plans of operations, business strategy, results of operations, and financial position. Because forward-looking statements relate to the future, they are subject to inherent uncertainties, risks and changes in circumstances that are difficult to predict. We caution you, therefore, against relying on any of these forward-looking statements.

Our actual results may differ materially from those contemplated by the forward-looking statements for a variety of reasons, including, without limitation, the possibility that estimates, projections and assumptions on which the forward-looking statements are based prove to be incorrect, central bank interest rates and future interest rate changes, the risks arising from the impact of affordability, inflation, tariffs, the war in the Middle East, the deterioration of the labor market of the United States, a recession which may result on the Company’s business, prospective customers, and on the national and global economy, our need for additional capital to meet future goals and milestone targets, our ability to attract homeowners to our products and services, our ability to comply with applicable regulatory requirements and new regulations and developments that may arise including the potential for regulatory changes regarding cryptocurrency and digital assets, artificial intelligence, and other areas that impact and may in the future impact the Company’s business, the possibility that our expectations and perceived benefits with respect to strategic transactions, including our recent acquisition of the remaining outstanding equity interest in MagicBlocks and a potential acquisition of TYTL if that transaction closes, prove to be incorrect, risks with respect to integrating acquired businesses, our ability to negotiate and execute definitive agreements, satisfy closing conditions, obtain required approvals including stockholder approvals and an independent fairness opinion with respect to a potential transaction with TYTL and the possibility that actual transaction economics, ownership percentages and other material terms may differ from those contemplated by the Letter of Intent (“LOI”) with TYTL as negotiations and due diligence progress, and the ability of us and third parties on which we depend to comply with applicable regulatory requirements, the risk that software and technology infrastructure on which we depend fail to perform as designed or intended, and the Risk Factors contained in our Form 10-K for the year ended December 31, 2025 and prospectus supplement dated March 10, 2026. Any forward-looking statement made by us in this presentation speaks only as of the date on which it is made. Factors or events that could cause our actual results to differ may emerge from time to time, and it is not possible for us to predict all of them. We undertake no obligation to publicly update any forward-looking statement, whether as a result of new information, future developments or otherwise, except as may be required by law.

Our Business

We are a fintech mortgage lender, fractional real estate equity purchase facilitator, and title services provider focused on streamlining the homeownership process through a digital platform. We utilize a proprietary technology platform that incorporates advanced analytics and machine learning tools, combined with human oversight, to support mortgage origination, equity purchase, and title services. Our business model is designed to provide consumers with more efficient access to mortgage and related financing solutions through its online platform. Approximately 77% of our loans are primarily non-qualified mortgage (“Non-QM”) loans, which typically serve borrowers with non-traditional income sources, including self-employment, investment, rental, or other non-W-2 income, or borrowers with significant assets.

We primarily act as lender for our conventional loan originations, where we are responsible for underwriting. For Non-QM loans, we operate primarily as a non-delegated lender and, to a much lesser extent, as a mortgage broker with third-party lenders. We leverage our technology platform and industry expertise to provide an alternative to traditional, more manual mortgage origination processes for residential properties in the United States.

As cryptocurrency adoption accelerates and becomes regulated by federal and state governments, we are positioning ourself as a leader in this fast-moving ecosystem, offering trusted infrastructure to help lenders scale into a future where crypto and compliance go hand-in-hand. Through our technology platform, we offer a fractional equity product in collaboration with our related party partner, whereby TYTL purchases the equity from homeowners seeking liquidity and funds such purchases from the sale of the cryptocurrency tokens. We provide TYTL access to our platform through our subsidiary, BeelineEquity, and provide title and escrow services through Beeline Title Holdings. Other than providing our technology platform and title and escrow services, we are not involved in any cryptocurrency or other transactions of TYTL.

On July 28, 2026, we entered into a non-binding letter of intent with TYTL regarding a proposed business combination pursuant to which TYTL would merge with and into the Company in an all-stock transaction. The proposed transaction is intended to combine our digital mortgage, lending, and title platform with TYTL’s blockchain-based real estate tokenization platform. Subject to the negotiation of definitive agreements, if the transaction occurs, it is expected that the combined company will pursue the development and commercialization of products designed to facilitate institutional participation in residential real estate through blockchain-enabled infrastructure while integrating mortgage lending, including Non-QM mortgage products, title, and settlement processes. The parties also intend to continue the development of TYTL’s home equity product, which is designed to utilize a Regulation D-compliant security structure together with blockchain technology and recorded real property interests. The proposed transaction remains subject to, among other things, completion of due diligence, negotiation and execution of definitive agreements, approval by the Special Committee of the Company’s Board of Directors and TYTL’s board of directors, receipt of a fairness opinion by TYTL, applicable regulatory approvals, approval by the stockholders of the Company and TYTL, and satisfaction of customary closing conditions. There can be no assurance that definitive agreements will be executed or that the proposed transaction will be completed. An overview of certain material terms of the LOI and the proposed transaction are disclosed in the Company’s Current Report on Form 8-K filed on August 3, 2026, and the copy of the LOI is filed as Exhibit 10.1 thereto.

As of June 30, 2026, we acquired the remaining outstanding equity interest in MagicBlocks, the artificial intelligence company whose technology powers Bob, our proprietary AI agent, and underpins key automation capabilities across our mortgage origination and title operations. The acquisition gives us full ownership and control of the AI technology already embedded across its platform. With MagicBlocks’ capabilities fully integrated, we expect to accelerate product innovation while supporting future initiatives across mortgage origination, title services, home equity products, and digital real estate transactions, reduce production costs, and improve the speed and consistency of the borrower experience. MagicBlocks continues to license its platform to other mortgage lenders and financial institutions.

During 2026, we announced a strategic partnership with Structured Real Estate Group (“SRG”), a real estate developer, to directly integrate our mortgage platform into SRG’s proprietary AI-driven real estate platform that enables homebuyers to receive fully customized mortgage and title solutions within a single, unified platform to evaluate financing, understand total ownership costs, and initiate the mortgage process instantly without leaving the SRG platform. SRG’s platform is designed as a next-generation real estate environment, combining property selection, smart home infrastructure, and community-level technology into a single digital interface. By embedding our mortgage and title capabilities directly into this ecosystem, the partnership removes friction from the homebuying process and creates a more transparent, efficient path to homeownership. The initial deployment of this integrated platform will support the development of approximately 2,000 new homes in the Dallas/Fort Worth area over the next 36 months.

Factors Affecting Our Performance

Interest Rate Sensitivity

Changes in interest rates significantly affect mortgage origination volumes. Lower interest rates generally increase refinancing activity, while higher rates tend to reduce both refinancing and purchase volumes, with refinancing being particularly sensitive to rate increases. However, rising rates may also reflect broader economic growth and inflation, which can support demand for cash-out refinancings, purchase loans, and home equity products, partially offsetting declines in rate-driven refinancing.

We are exposed to interest rate risk. Increases in interest rates typically reduce the fair value of our loans held for sale (“LHFS”) and interest rate lock commitments (“IRLCs”). Conversely, declining rates tend to increase the value of our LHFS and IRLCs. We utilize IRLCs to manage exposure to interest rate movements between loan origination and sale.

Our operating results are expected to remain sensitive to interest rate fluctuations and other macroeconomic factors as we continue to scale our operations and increase funded loan volumes, variability in results, including the potential for net losses, may continue.

Market and Economic Conditions

Mortgage lending activity is influenced by overall economic conditions, including interest rates, employment levels, home price trends, and consumer confidence. Purchase originations are affected by these factors as well as seasonal patterns, with higher activity typically occurring in the second and third quarters. Refinancing volumes are primarily driven by changes in mortgage interest rates.

While demand for consumer credit has generally remained resilient, elevated or volatile interest rates and broader economic uncertainty may cause borrowers to delay financing decisions. As a result, our revenues and operating results may fluctuate across reporting periods.

Housing Supply and Demand

The availability of housing inventory and home price levels are key drivers of purchase mortgage volume. Limited housing supply has constrained transaction activity and contributed to higher home prices, particularly in a higher interest rate environment, which reduces affordability. Over time, supply-demand imbalances may encourage increased residential construction, which could expand housing inventory and support future purchase mortgage activity.

Adoption of Digital Lending Solutions

Our growth depends in part on our ability to deliver an efficient and competitive customer experience. Consumers have increasingly adopted digital platforms for complex financial transactions, and this trend is expected to continue as younger demographics enter the housing market. Our platform is designed to streamline the loan process and improve accessibility relative to more traditional approaches.

In addition, participants across the homeownership ecosystem—including financial institutions, real estate professionals, and service providers—are increasingly seeking technology-enabled solutions to enhance efficiency and customer experience. This trend may support continued demand for digital lending platforms and related services.

Technology and Product Expansion

We continue to invest in technology to automate and streamline loan origination processes, reduce costs, and improve execution speed and accuracy. Our platform is designed to support the introduction of new products and integration with partners with limited incremental cost.

We also expect to expand our home financing product offerings over time to address a broader range of customer needs. These efforts are intended to support customer acquisition, increase engagement, and enhance the overall value proposition.

Customer Acquisition and Growth

Our ability to grow depends on attracting and retaining customers in a cost-effective manner. This includes delivering a competitive digital experience and maintaining efficient marketing strategies. If customer acquisition efforts become less effective—due to market conditions, competition, or reduced visibility on lead generation platforms—we may need to increase spending on marketing, which could impact operating expenses.

Recent Developments

Inflation has remained above the Federal Reserve’s long-term target, although the pace of price increases moderated compared with the elevated levels experienced during 2022–2023. Headline Consumer Price Index (“CPI”) inflation increased during the first five months of 2026, reflecting, in part, higher energy prices and continued pressure from shelter and services costs. However, inflation moderated in June 2026 as energy prices declined following a temporary easing in geopolitical tensions, with annual CPI increasing approximately 3.5% year-over-year, down from approximately 4.2% in May 2026. Despite this improvement, inflation remains elevated relative to the Federal Reserve’s target, and the future path of inflation remains uncertain.

The ultimate impact of geopolitical conflicts in the Middle East, U.S. and foreign tariff actions implemented during 2024–2026, and subsequent monetary and fiscal policy developments remains uncertain. These factors have the potential to affect supply chains, energy markets, input costs, and pricing dynamics across numerous industries. Although energy prices moderated during June 2026, renewed geopolitical tensions have contributed to continued volatility in oil markets, increasing uncertainty regarding future inflation trends.

Housing and other services-related costs continued to be primary contributors to underlying inflation during the first half of 2026 and continued to constrain residential mortgage originations. While shelter inflation has moderated from prior peak levels, housing affordability remains challenged by elevated home prices, limited housing inventory in many markets, and mortgage interest rates that remain well above historical averages. Higher financing costs have continued to suppress home purchase and refinance activity. Nevertheless, the Company believes that ongoing supply-demand imbalances and continued residential construction activity may improve housing inventory over time and contribute to future mortgage market activity.

For the period from October 1, 2025 through June 30, 2026, U.S. residential mortgage interest rates, as measured by the MORTGAGE30US series published by the Federal Reserve Bank of St. Louis, remained elevated despite moderating from the highs experienced during 2025.

At the beginning of October 2025, the average 30-year fixed-rate mortgage was generally in the low-to-mid 7% range. Mortgage rates declined during late 2025 and into the first quarter of 2026, reaching approximately the low-6% range before increasing during the second quarter of 2026 as inflation concerns, tariff uncertainty, and geopolitical developments placed upward pressure on U.S. Treasury yields. By the end of June 2026, average 30-year mortgage rates had increased to approximately 6.4% to 6.5%, remaining below 2025 highs but materially above historical norms.

Overall, although mortgage rates during the first half of 2026 remained below the peak levels experienced during 2025, they continued to constrain housing affordability and mortgage origination activity. The outlook for mortgage rates remains uncertain and will likely depend on the trajectory of inflation, Federal Reserve monetary policy, global economic conditions, and geopolitical developments. Continued volatility in energy markets, tariff-related cost pressures, and inflation expectations may place upward pressure on U.S. Treasury yields and, consequently, residential mortgage rates.

The Company continues to monitor these macroeconomic conditions, including inflation trends, interest rate movements, and geopolitical developments, which may impact consumer demand, operating costs, and overall financial performance.

Results of Operations

Certain prior year amounts have been reclassified for consistency with the current year presentation. These reclassifications had no effect on the reported results of operations or cash flows. The operating results of Nimble Title Holdings, LLC and its subsidiaries, and Bridgetown Spirits Corp. have been classified as discontinued operations during the six months ended June 30 2025.

Three and Six Months Ended June 30, 2026 Compared to the Three and Six Months Ended June 30, 2025

(Dollars in thousands)

Net Revenues

Gain on sale of loans, net increased $0.7 million, or 64%, to $1.8 million for the three months ended June 30, 2026 compared to $1.1 million for the three months ended June 30, 2025, and increased $1.7 million, or 89%, to $3.6 million for the six months ended June 30, 2026 compared to $1.9 million for the six months ended June 30, 2025. Both periods were driven by increased loan originations and loan pricing.

Loan origination fees increased $0.2 million, or 100%, to $0.4 million for the three months ended June 30, 2026 compared to $0.2 million for the three months ended June 30, 2025, and increased $0.5 million, or 167%, to $0.8 million for the six months ended June 30, 2026 compared to $0.3 million for the six months ended June 30, 2025, driven by increased loan originations. The quantity of loan originations increased by 53, or 28%, to 240 for the three months ended June 30, 2026 compared to 187 for the three months ended June 30, 2025, and increased by 213, or 68%, to 528 for the six months ended June 30, 2026 compared to 315 for the six months ended June 30, 2025.

Title fees were flat for the three months ended June 30, 2026 and 2025. Title fees increased $0.2 million, or 33%, to $0.8 million for the six months ended June 30, 2026 compared to $0.6 million for the six months ended June 30, 2025 primarily driven by increased settlement fees during the six months ended June 30, 2026.

Operating Expenses

Compensation, commissions and benefits increased $0.9 million, or 43%, to $3.0 million for the three months ended June 30, 2026 compared to $2.1 million for the three months ended June 30, 2025, and increased $1.9 million, or 45%, to $6.1 million for the six months ended June 30, 2026 compared to $4.2 million for the six months ended June 30, 2025. Both periods were primarily driven by increased employee stock compensation expense of $0.8 million for the three months and $1.4 million for the six months, and related to our 2025 Equity Incentive Plan, which was adopted in October of 2025.

General and administrative expenses decreased $0.2 million, or 14%, to $1.2 million for the three months ended June 30, 2026 compared to $1.4 million for the three months ended June 30, 2025, and decreased $0.1 million, or 3%, to $3.1 million for the six months ended June 30, 2026 compared to $3.2 million for the six months ended June 30, 2025. Both periods were primarily driven by decreased professional fees offset by increased vendor and board of directors stock compensation expense related to our 2025 Equity Incentive Plan, which was adopted in October of 2025.

Depreciation and amortization was $0.8 million for both the three months ended June 30, 2026 and 2025, and $1.6 million and $1.7 million for the six months ended June 30, 2026 and 2025, respectively.

Marketing and advertising increased $0.3 million, or 38%, to $1.1 million for the three months ended June 30, 2026 compared to $0.8 million for the three months ended June 30, 2025, and increased $0.9 million, or 69%, to $2.2 million for the six months ended June 30, 2026 compared to $1.3 million for the six months ended June 30, 2025. Both periods were primarily due to increased leads reflective of higher loan originations.

Other operating expenses increased $0.5 million, or 100%, to $1.0 million for the three months ended June 30, 2026 compared to $0.5 million for the three months ended June 30, 2025, and increased $0.9 million, or 82%, to $2.0 million for the six months ended June 30, 2026 compared to $1.1 million for the six months ended June 30, 2025. Both periods were primarily due to increased fees charged by investors of our loans, which is directly related to higher loan originations, and increased software service fees.

Other Income (Expense)

Interest expense, exclusive of the warehouse line of credit, was $0.4 million and $1.9 million for the three and six months ended June 30, 2025 related to interest on debt and the amortization of debt and warrant related expenses, respectively.

Gain on Remeasurement of Previously Held Equity Interest

On June 30, 2026, we completed the acquisition of the remaining outstanding ownership interest of 52.4% in MagicBlocks. The fair value of our original 47.6% interest was remeasured at $0.5 million based on an independent business valuation of MagicBlocks of $1.0 million.

Non-GAAP Financial Measure

We report adjusted EBITDA, which is a financial measure not prepared in accordance with generally accepted accounting principles (“non-GAAP”) that supplements our financial results presented in accordance with GAAP. This non-GAAP financial measure should not be considered in isolation and is not intended to be a substitute for any GAAP financial measures, but rather provides supplemental information that we believe helps investors better understand our business, our business model, and how we analyze our performance.

Non-GAAP financial measures have limitations in their usefulness to investors because they have no standardized meaning and are not prepared under any comprehensive set of accounting rules or principles. Accordingly, other companies, including companies in our industry, may calculate similarly titled non-GAAP financial measures differently or may use other measures to evaluate their performance, all of which could reduce the usefulness of our non-GAAP financial measures as tools for comparison.

We include a reconciliation of adjusted EBITDA to GAAP net loss, its most closely comparable GAAP measure. We encourage investors and others to review our unaudited consolidated financial statements and notes thereto in their entirety included elsewhere in this Report, not to rely on any single financial measure, and to consider adjusted EBITDA only in conjunction with its respective most closely comparable GAAP financial measure.

We believe this non-GAAP financial measure is useful to investors for supplemental period-to-period comparisons of our business and understanding and evaluating our operating results for the following reasons:

• Adjusted EBITDA is widely used by investors and securities analysts to measure a company’s operating performance without regard to items such as depreciation and amortization expense, interest and amortization on debt, income tax expense, stock-based compensation expense, and costs that are unique or non-recurring in nature or otherwise unrelated to our ongoing revenue-generating operations, all of which can vary substantially from company to company depending on their financing and capital structures;
• We use adjusted EBITDA in conjunction with financial measures prepared in accordance with GAAP for adjusted purposes, including the preparation of our annual operating budget, as a measure of our core operating results and the effectiveness of our business strategy, and in evaluating our financial performance; and
• Adjusted EBITDA provides consistency and comparability with our past financial performance, facilitates period-to-period comparisons of our core operating results, and also facilitates comparisons with other peer companies, many of which use similar non-GAAP financial measures to supplement their GAAP results.

Further, although we use this non-GAAP measure to assess the financial performance of our business, it has limitations as an analytical tool, and should not be considered in isolation or as a substitute for analysis of our financial results as reported under GAAP. Some of these limitations are, or may in the future be, as follows:

• Although depreciation and amortization expense is a non-cash charge, the assets being depreciated and amortized may have to be replaced in the future, and adjusted EBITDA does not reflect cash capital expenditure requirements for such replacements or for new capital expenditure requirements;
• Adjusted EBITDA excludes non-cash stock-based compensation expense which is a significant recurring expense for our business and an important part of our compensation strategy;
• Adjusted EBITDA does not reflect changes in, or cash requirements for, our working capital needs;
• Adjusted EBITDA does not include interest expense, or the cash requirements necessary to service interest or principal payments on our non-funding debt, which reduces cash available to us; and
• The expenses and other items that we exclude in the calculation of adjusted EBITDA may differ from the expenses and other items, if any, that other companies may exclude from similarly titled non-GAAP measures when they report their operating results, and we may, in the future, exclude other significant, unusual or non-recurring expenses or other items from these financial measures.

Because of these limitations, adjusted EBITDA should be considered along with other financial performance measures presented in accordance with GAAP, and not as an alternative or substitute for our financial results prepared and presented in accordance with GAAP.

Adjusted EBITDA

We calculate adjusted EBITDA as net income (loss) adjusted for the impact of interest expense, depreciation and amortization expense, gain on remeasurement of previously held equity interest, net loss from discontinued operations, stock-based compensation expense, and other non-recurring or non-core operational expenses.

The following table presents a reconciliation of net income (loss) to adjusted EBITDA for the three and six months ended June 30, 2026 and 2025 (unaudited):

(Dollars in thousands)

(1) For the three and six months ended June 30, 2026, non-recurring expenses included costs related to the class action complaint. For the six months ended June 30, 2025, non-recurring expenses included merger costs related to the shareholder meeting on March 7, 2025 to approve the name changing to Beeline Holdings, Inc. and to approve the Series F and F-1 Preferred Stock (shares received in the merger) to convert to common shares, as well as costs related to the Nasdaq initial listing.

Capital Resources and Liquidity

Statements of Cash Flows

Net cash used in operating activities of continuing operations decreased from $5.6 million for the six months ended June 30, 2025 to $1.5 million for the six months ended June 30, 2026 primarily due to increased origination volume related to an increase availability of $25 million in our warehouse lines of credit.

For the six months ended June 30, 2026 and 2025, net cash used in investing activities were flat.

For the six months ended June 30, 2026, net cash used in financing activities of continuing operations was $0.1 million from net repayments under the warehouse lines of credit of $4.1 million related to adding two warehouse lines of credit of $5.0 million each in October 2025, offset by $4.1 million raised from equity transactions. For the six months ended June 30, 2025, net cash provided by financing activities of continuing operations was $10.9 million primarily from $15.8 million raised from equity transactions, offset by repayments of $0.9 million of the warehouse line and $4.1 million of secured credit facilities.

Financial Policy. We intend to maintain a disciplined financial policy and improve our credit metrics, which are critical to our lending partners.

Liquidity Policy. We maintain a strong focus on liquidity and define our liquidity risk tolerance based on sources and uses to maintain a sufficient liquidity position to meet our business needs and financial obligations under both normal and stressed conditions. We believe that our consolidated liquidity and availability under our equity offerings will be sufficient to meet our liquidity needs.

Liquidity. Our primary sources of liquidity consist of cash and cash equivalents and equity offerings. Cash generation may fluctuate due to various factors, including seasonality, timing of loan originations and repayments, market conditions, and our ability to execute strategic asset sales or dispositions. As of August 14, 2026, the Company had approximately $1.7 million in cash as described below.

For the six months ended June 30, 2026, we sold 2,114,575 shares of common stock for gross proceeds of $3.2 million under the ELOC Agreement. Subsequent to June 30, 2026, we further sold 113,045 shares of common stock for gross proceeds of $0.1 million.

During six months ended June 30, 2026, we sold 318,168 shares for gross proceeds of $0.8 million under an at the market offering. Subsequent to June 30, 2026, we further sold 36,087 shares of common stock for gross proceeds of $37,912.

On July 31, 2026, we sold and issued to WVP Emerging Manager Onshore Fund LLC - C/M Capital Series a promissory note in the principal amount of $0.4 million in exchange for a purchase price of $0.3 million, net of an original issue discount of $50,000. The note matures in 60 days, subject to acceleration provisions in connection with certain enumerated events of default. The note bears interest at a rate of 9% per annum. We agreed to prepay the note upon receiving proceeds from capital raising transactions exceeding $3 million, in an amount equal to 30% of the net proceeds from such capital raising transactions until the note is repaid in full. The note is also prepayable at any time at our election.

On August 12, 2026, Mr. Liuzza, our CEO, invested an additional $0.5 million in the Company through a convertible note, which will automatically convert into shares of our common stock on August 19, 2026 at the higher of $1.50 per share or the average closing five-day VWAP during regular trading hours beginning August 12, 2026.

We do not have sufficient cash resources to meet our working capital needs for the next 12 months. We expect we need to raise at least $6 million to meet our internal cash requirements. The availability of additional financing will be largely dependent on our common stock price and liquidity as we utilize our ELOC and ATM Agreements as well as on our operating success, including improved margins as well as operational improvements, which will be necessary to attract investors. However, there can be no assurance that we will be successful in securing the necessary capital on favorable terms, or at all. We have no material off-balance sheet arrangements as of the date of this Report.

Critical Accounting Policies and Estimates

Critical accounting policies and practices are those that are both most important to the portrayal of the Company’s financial condition and results, and require management’s most difficult, subjective, or complex judgments, often as a result of the need to make estimates about the effects of matters that are inherently uncertain. The critical accounting policies and practices used by the Company in the consolidated financial statements for the six months ended June 30, 2026 relate to the policies and practices the Company uses to account for:

Mortgage loans held for sale and gains on sale of loans revenue recognition. Mortgage loans held for sale are carried at fair value under the fair value option in accordance with ASC 825, Financial Instruments, with changes in fair value recorded in gain on sale of loans, net on the consolidated statements of operations. The fair value of mortgage loans held for sale committed to investors is calculated based on the investor commitment.

Gains and losses from the sale of mortgage loans held for sale are recognized based upon the difference between the sales proceeds and carrying value of the related loans upon sale and are recorded in gain on sale of loans, net on the consolidated statements of operations. Sales proceeds reflect the cash received from investors through the sale of the loan and servicing release premium. Gain on sale of loans, net also includes the unrealized gains and losses associated with the changes in the fair value of mortgage loans held for sale, and the realized and unrealized gains and losses from derivative instruments.

Mortgage loans held for sale are considered sold when the Company surrenders control over the financial assets. Control is considered to have been surrendered when the transferred assets have been isolated from the Company, beyond the reach of the Company and its creditors; the purchaser obtains the right (free of conditions that constrain it from taking advantage of that right) to pledge or exchange the transferred assets; and the Company does not maintain effective control over the transferred assets through either an agreement that both entitles and obligates the Company to repurchase or redeem the transferred assets before their maturity or the ability to unilaterally cause the holder to return specific financial assets. The Company typically considers the above criteria to have been met upon acceptance and receipt of sales proceeds from the purchaser.

Mortgage loans sold to investors by the Company, and which met investor underwriting guidelines at the time of sale, may be subject to repurchase in the event of specific default by the borrower or subsequent discovery that underwriting standards were not met. The Company may, upon mutual agreement, indemnify the investor against future losses on such loans. Actual losses incurred are reflected as a reduction in gains on sale of loans, net in the consolidated statements of operations.

Since mortgage loans held for sale have maturity dates greater than one year from the balance sheet date but are expected to be sold in a short time frame (less than one year), they are recorded as current assets.

Changes in the balance of mortgage loans held for sale are included in cash flows from operating activities in the consolidated statements of cash flows in accordance with ASC 230-10-45-21, Statement of Cash Flows.

Revenue recognition

Gains on Sale of Loans, Net

See discussion above under “Mortgage Loans Held for Sale and Gain on Sale of Loans Revenue Recognition” and below under “Derivative Financial Instruments and Revenue Recognition.”

Loan Origination Fees and Costs

Loan origination fees represent revenue earned from originating mortgage loans. Loan origination fees generally represent flat per-loan fee amounts and are recognized as revenue at the time the mortgage loans are funded since the loans are held for sale. Loan origination costs are charged to operations as incurred.

Interest Income

Interest income on mortgage loans held for sale is recognized for the period from loan funding to sale based upon the principal balance outstanding and contractual interest rates. Revenue recognition is discontinued when loans become 90 days delinquent, or when, in management’s opinion, the recovery of principal and interest becomes doubtful and the mortgage loans held for sale are put on nonaccrual status. For loans that have been modified, a period of six payments is required before the loan is returned to an accrual basis.

Interest Expense

Interest expense relating to the warehouse lines of credit is included in net revenues. Other interest expense is included in other (income)/expense.

Title Fees

Settlement fees and commissions are earned at loan settlement. Title fees also include service fees for providing title and escrow services related to fractional equity sales, see below.

Fractional Equity Revenues, Related Party

The Company receives a transaction fee of 3.5% of the amount of equity sold by homeowners to TYTL for customer service, transaction processing and platform support. Revenue is recognized at a point in time when the closing occurs between TYTL and the homeowner.

Other Revenues

The Company receives a consulting fee related to certain agreed upon services provided to TYTL , a related party. Revenue is recognized on a monthly basis as the services are performed. Other revenues also include fees received from a marketing partner.

Goodwill. Goodwill is the excess of the purchase price over the estimated fair value of identifiable net assets acquired in business combinations. The Company tests goodwill for impairment annually in the fourth quarter, or more frequently when indications of potential impairment exist. The Company monitors the existence of potential impairment indicators throughout the fiscal year. The Company may elect to perform either a qualitative test or a quantitative test to determine if it is more likely than not that the carrying value of a reporting unit exceeds its estimated fair value. Fair value reflects the price a market participant would be willing to pay in a potential sale of the reporting unit. If the estimated fair value of the Company exceeds its carrying value, then the Company concludes the goodwill is not impaired. If the carrying value of the Company exceeds its estimated fair value, the Company recognizes an impairment loss in an amount equal to the excess, not to exceed the amount of goodwill.

Intangible assets. The Company accounts for certain finite-lived intangible assets at amortized cost and other certain indefinite-lived intangible assets at cost. Management reviews all intangible assets for probable impairment whenever events or circumstances indicate that the carrying amount of such assets may not be recoverable. If there is an indication of impairment, management would prepare an estimate of future cash flows (undiscounted and without interest charges) expected to result from the use of the asset and its eventual disposition. If these estimated cash flows were less than the carrying amount of the asset, an impairment loss would be recognized to write down the asset to its estimated fair value.

Property and equipment, net. Under ASC 350-40, Internal-Use Software, the Company capitalizes certain qualifying costs incurred during the application development stage in connection with the development of internal-use software. Costs related to preliminary project activities are expensed as incurred and post-implementation activities will be expensed as incurred. Capitalized software costs are amortized over the useful life of the software, which is five years. Impairment of internal-use software is evaluated under ASC 350-40-35, Subsequent Measurement, on a qualitative basis and if indicators exist, then a quantitative analysis is performed under ASC 360.

As a “smaller reporting company” as defined by Item 10 of Regulation S-K, we are not required to provide information required by this item.

We maintain disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934 (“Exchange Act”) that are designed to provide reasonable assurances that the information required to be disclosed in reports filed or submitted under the Exchange Act is recorded, processed, summarized, and reported within the time periods specified in the SEC rules and forms and that such information is accumulated and communicated to management, including the Chief Executive Officer and the Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosures.

We conducted an evaluation (pursuant to Rule 13a-15(b) of the Exchange Act)), under the supervision and with the participation of management, including the Chief Executive Officer and Chief Financial Officer, of the effectiveness of the Company’s disclosure controls and procedures (as defined in Rule 13a-15(e)) as of the end of the period covered by this report. Based on the evaluation, the Chief Executive Officer and Chief Financial Officer has concluded that these disclosure controls and procedures were not effective as of June 30, 2026.

There were no changes in internal control over financial reporting (as defined in Rule 13a-15(f) of the Exchange Act) during the quarter ended June 30, 2026, that materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.