# Beeline Holdings, Inc.: Form 10-Q for the period ended Mar 31, 2025

- Company: [Beeline Holdings, Inc.](/companies/blne.md) (CIK 1534708)
- Form: 10-Q
- Filed: 2025-05-20
- Accepted by EDGAR: May 20, 2025, 16:20 ET
- Period: 2025-03-31
- Accession: 0001641172-25-011724
- Inline XBRL: yes
- Main document: https://www.sec.gov/Archives/edgar/data/1534708/000164117225011724/form10-q.htm
- All documents and exhibits: https://www.sec.gov/Archives/edgar/data/1534708/000164117225011724/

## Figures reported in this filing

Standardized XBRL line items for the period ended 2025-03-31.

| Line item | Period | Value | XBRL concept |
| --- | --- | ---: | --- |
| Revenue | 3 months, 2025-01-01 to 2025-03-31 | $1.8m | us-gaap:Revenues |
| Operating income | 3 months, 2025-01-01 to 2025-03-31 | −$4.9m | us-gaap:OperatingIncomeLoss |
| Interest expense | 3 months, 2025-01-01 to 2025-03-31 | $1.9m | us-gaap:InterestExpenseNonoperating |
| Net income | 3 months, 2025-01-01 to 2025-03-31 | −$6.8m | us-gaap:NetIncomeLoss |
| Basic EPS | 3 months, 2025-01-01 to 2025-03-31 | −$6.14 | us-gaap:EarningsPerShareBasic |
| Operating cash flow | 3 months, 2025-01-01 to 2025-03-31 | −$1.5m | us-gaap:NetCashProvidedByUsedInOperatingActivities |
| Cash and equivalents | at 2025-03-31 | $1.5m | us-gaap:CashAndCashEquivalentsAtCarryingValue |
| Current assets | at 2025-03-31 | $8.7m | us-gaap:AssetsCurrent |
| Total assets | at 2025-03-31 | $63.8m | us-gaap:Assets |
| Current liabilities | at 2025-03-31 | $14.6m | us-gaap:LiabilitiesCurrent |
| Total liabilities | at 2025-03-31 | $15.7m | us-gaap:Liabilities |
| Shareholders' equity | at 2025-03-31 | $47.1m | us-gaap:StockholdersEquity |

## Management's discussion and analysis

As filed, 45,418 characters.

### Forward-Looking Statements

This section of the Quarterly Report includes “forward-looking statements” as that term is defined in the Private Securities Litigation Reform Act of 1995. Forward-looking statements give current expectations or forecasts of future events about the company or our outlook and involve uncertainties that could significantly impact results. You can identify forward-looking statements by the fact they do not relate to historical or current facts and by the use of words indicating anticipation or speculation such as “believe,” “expect,” “estimate,” “anticipate,” “will be,” “should,” “plan,” “project,” “intend,” “could” and similar words or expressions.

You should not place undue certainty on these forward-looking statements, which speak only as of the date made. Except as required by law, we undertake no obligation to update any forward-looking statements, whether as a result of new information, future events, or otherwise. These forward-looking statements are subject to certain risks and uncertainties that could cause actual results to differ materially from these forward-looking statements. Factors that could cause our expectations to be unfulfilled include those discussed in Item 1A of Part I of our annual report on Form 10-K for the year ended December 31, 2024 entitled “Risk Factors” as well as factors we have not yet anticipated.

### Objective

The following discussion provides an analysis of the financial condition, cash flows and results of operations from management’s perspective of Beeline Holdings, Inc. (the “Company”). Our objective is to provide discussion of events and uncertainties known to management that are reasonably likely to cause the reported financial information not to be indicative of future operating results or of future financial condition and to also offer information that provides an understanding of our financial condition, cash flows and results of operations.

### Overview

The Company was incorporated under the laws of Nevada in 2004.

#### Merger

On September 4, 2024, the Company entered into an Agreement and Plan of Merger and Reorganization (the “Merger”) with Bridgetown Spirits Corp. (“Bridgetown Spirits”) and Beeline Financial Holdings, Inc. (“Beeline Financial”). The Merger closed on October 7, 2024. On March 12, 2025, the Company changed its name to Beeline Holdings, Inc. (the “Company).

Beeline Financial was incorporated in Delaware on July 1, 2020 via a merger with Beeline Financial Holdings, Inc., a Rhode Island corporation founded on September 20, 2018.

#### Debt Exchange Agreement

On September 4, 2024, the Company and its subsidiary, Craft Canning + Printing (“Craft C+P”), entered into a Debt Exchange Agreement (the “Debt Exchange Agreement”), which closed on October 7, 2024, resulting in the assignment by the Company of 720 barrels of spirits to Craft C+P, followed by the merger of Craft C+P into a limited liability company owned by certain creditors of the Company and the deconsolidation of Craft C+P. The Company accounted for the asset and equity transfers associated with the various transactions at fair value in accordance with ASC 470-60, *Debt - Troubled Debt Restructurings by Debtors.*

Subsequent to the execution of the Debt Exchange Agreement, the Company organized a subsidiary, Bridgetown Spirits, which was incorporated on October 3, 2024, and assigned the Company’s business of manufacturing and marketing spirits to Bridgetown Spirits.

Upon completion of the Debt Exchange Agreement, the Company was no longer involved in the business of digital printing and mobile canning. The Company reports discontinued operations by applying the following criteria in accordance with ASC 205-20, *Presentation of Financial Statements – Discontinued Operations*: (1) Component of an entity; (2) Held for sale criteria; and (3) Strategic shift. Given that the effect of the Debt Exchange Agreement meets all the criteria for classification of held for sale, the assets and liabilities of Craft C+P were disposed of on October 7, 2024. The operating results of Craft C+P have been classified as discontinued operations during the three months ended March 31, 2024.

The consolidated financial statements include the consolidated accounts of the Company and its wholly-owned subsidiaries, Beeline Financial Holdings, Inc. (“Beeline Financial”), Beeline Title Holdings, Inc. (“Beeline Title Holdings”), Beeline Mortgage Holdings, Inc. (“Beeline Mortgage”), Beeline Labs, Inc., and Beeline Loans Pty Ltd. (“Australian Subsidiary”).

Beeline Title Holdings has four subsidiaries, Beeline Title, LLC (“Beeline Title”), Beeline Texas Title, LLC (“Beeline Texas Title”), Beeline Settlement Services, LLC (“Beeline Settlement Services”), and Beeline Title Agency, LLC (“Beeline Title Agency”). Beeline Mortgage Holdings has one subsidiary, Beeline Loans, Inc. (“Beeline Loans”).

The Company has two majority-owned subsidiaries, Nimble Title Holdings, Inc. (“Nimble Title Holdings”) and Bridgetown Spirits. Nimble Title Holdings is 50.1% owned by the Company and 49.9% owned by a former non-controlling shareholder of Beeline Financial. Bridgetown Spirits is 53% owned by the Company.

Nimble Title Holdings has four subsidiaries, Nimble Title, LLC (“Nimble Title”), Nimble Title Agency, LLC (“Nimble Title Agency”), Nimble Texas Title, LLC (“Nimble Texas Title”), and Nimble Settlement Services, LLC (“Nimble Settlement Services”).

The discussion which follows should be read in conjunction with the consolidated financial statements and notes to the consolidated financial statements contained in this Report.

### Our Business

Beeline Financial is a full service direct-to-consumer lender specializing in conventional conforming and non-conforming residential first-lien mortgages and providing title services. Beeline Financial also has an emerging business in anonymized data sales and technology licensing.

Bridgetown Spirits manufactures (through sub-contractors), acquires, blends, bottles, imports, markets and sells a wide variety of alcoholic beverages under recognized brands. Bridgetown Spirits’ brands span several alcoholic beverage categories, including whiskey, vodka, rum, and tequila. Bridgetown Spirits sells products on a wholesale basis to distributors in open states and through brokers in control states.

#### Beeline Financial

Beeline Financial’s performance is influenced by several key factors, including fluctuations in interest rates, economic conditions, housing supply, technological advancements, and its ability to acquire and retain customers. Interest rate changes have a direct impact on mortgage loan refinancing and overall mortgage loan volume. In a declining interest rate environment, refinancing activity typically increases, whereas rising interest rates tend to reduce refinancing and home purchase transactions. However, higher rates can also drive demand for cash-out refinancings and home equity loans. Following a prolonged period of historically low rates, interest rates began to rise in April 2021 due to inflation, increases in the federal funds rate, and other monetary policies. This upward trend, which continued through 2023, significantly reduced mortgage market activity and the pool of borrowers who could benefit from refinancing. Additionally, higher rates discourage homebuyers from entering the market and lead to a more competitive lending environment, compressing margins and reducing origination volumes.

The broader economic environment plays a crucial role in mortgage lending activity. Interest rate movements, employment trends, home price appreciation, and consumer confidence all affect mortgage origination volumes. Typically, home sales peak in the second and third quarters, but in 2022 and 2023, rising interest rates and ongoing housing supply constraints disrupted these seasonal trends. Despite steady consumer demand for credit, high interest rates and economic uncertainty may cause borrowers to delay financing decisions, leading to fluctuations in Beeline’s revenue and financial performance.

Limited housing supply has constrained home purchase activity. Rising interest rates have further exacerbated this issue by increasing home prices, reducing affordability, and discouraging transactions. However, Beeline believes that persistent imbalances between supply and demand will ultimately drive greater home construction, expanding housing inventory and stimulating future mortgage activity.

Beeline Financial’s ability to attract and retain customers depends on delivering a seamless and competitive digital mortgage experience. The shift toward digital transactions, accelerated by the COVID-19 pandemic, has increased consumer willingness to engage in high-value online purchases, including mortgage applications. Beeline Financial’s platform is designed to provide a convenient and efficient digital experience, positioning it favorably against traditional mortgage origination methods. With Millennial and Generation Z homeownership rates on the rise, Beeline Financial anticipates continued growth in demand for digital mortgage solutions.

Technological innovation remains central to Beeline Financial’s strategy. Beeline Financial’s proprietary technology enhances efficiency, reduces costs, and improves loan processing quality. By automating key origination tasks, Beeline Financial streamlines interactions for consumers, employees, and partners. Its intuitive digital interface minimizes reliance on paper applications and manual processes, enabling faster and more efficient loan transactions. Continued investment in automation and technology development will further reduce production costs and enhance customer acquisition efforts.

Customer acquisition is another critical component of Beeline Financial’s success. Beeline Financial aims to expand its reach while providing a highly personalized digital experience. If traditional customer acquisition methods prove insufficient, especially in challenging market conditions, Beeline Financial may need to invest additional resources in sales and marketing to maintain growth. Increased marketing expenditures could elevate service costs, making it essential to balance customer acquisition efforts with cost efficiency.

In the ordinary course of Beeline Financial’s operations, it finances the majority of its loan volume on a short-term basis, typically less than 10 days, mainly utilizing a warehouse line of credit with a capacity of $5.0 million. The repayments of Beeline Financial’s borrowings come from the revenue generated by selling its loans to a network of purchasers.

In 2024, Beeline Financial made significant investments in its platform to leverage mortgage origination opportunities, despite overall lower volumes compared to 2020 and 2021 due to fluctuating interest rates. In the fourth quarter, a temporary decline in the 10-year Treasury rate drove a notable increase in loan originations, reinforcing our belief that interest rates, housing supply, and affordability will remain key factors influencing future volume. Additionally, Beeline Financial has expanded its focus on its B2B SaaS strategy, which is also subject to macroeconomic conditions.

To measure operational efficiency and growth, we track a range of performance metrics in our lending and title businesses, including production data. Beeline Loans, the principal operating subsidiary of Beeline Financial, uses data to track margin and gain-on-sale revenue. The title companies use data to track file revenue. Beeline uses industry tools to benchmark its margin and note rates against the broader mortgage origination market. We also evaluate key business drivers for Beeline Financial subsidiaries, such as Beeline Labs, by monitoring revenue, unit sales, and SaaS (B2B) growth potential. Additionally, we assess customer acquisition costs and profitability per loan to optimize financial performance. These key indicators help gauge progress toward our strategic and long-term growth objectives.

#### Bridgetown Spirits

Bridgetown Spirits operates in a highly competitive, heavily regulated industry across multiple states, where both operations and distributor importance vary by location. Following a period of declining distribution, Bridgetown Spirits has focused on refining its distribution strategy. While Bridgetown Spirits has lost distribution in some key states, it has strengthened its presence in others. Restoring and optimizing distribution remains a critical challenge, impacting volumes and future sales.

In 2024, Bridgetown Spirits completed a restructuring aimed at streamlining operations by focusing on core business activities while outsourcing non-core functions, including production. As a result, its overall expenses decreased related to manufacturing, distribution, and sales activities. To further enhance efficiency, Bridgetown Spirits established key partnerships with external resources to achieve lower costs and improved sales performance. The impact of these changes was partially reflected in the fourth quarter of 2024, but full-year results do not yet capture their complete effect.

### Results of Operations

The Merger was structured and accounted for as a business combination with the Company as the acquirer of 100% of the controlling equity interests of Beeline Financial and its subsidiaries. The Company’s consolidated financial statements for the three months ended March 31, 2024 do not include Beeline Financial’s results of operations. The Company’s consolidated financial statements reflect the final purchase accounting adjustments in accordance with ASC 805, *Business Combinations*, whereby the purchase price was allocated to the assets acquired and liabilities assumed based upon their estimated fair values on the acquisition date. Due to the Merger, management believes that the consolidated results of operations for 2025 are not directly comparable to those of 2024, as the prior year reflects the performance of Bridgetown Spirits.

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., the statement of operations was restructured to represent the new consolidation of both businesses for 2024. In addition, the 2024 consolidated statement of operations has been reclassified to retrospectively present discontinued operations.

Given these structural changes, management believes that segment-level reporting provides a more meaningful basis for evaluating performance. Accordingly, a comparative analysis of the Company’s operating segments is presented below, which more accurately reflects the ongoing composition of the business.

### Three Months Ended March 31, 2025 Compared to the Three Months Ended March 31, 2024

### Consolidated Results

*(Dollars in thousands, except per share amounts)*

| Revenues | 2025 | 2024 |
| --- | ---: | ---: |
| Beeline Financial | $1,350 | $- |
| Bridgetown Spirits | 482 | 597 |
| **Total Revenues** | **$1,832** | **$597** |
| **Net Loss and Loss per Share** |  |  |
| Net loss from continuing operations | $(6,927) | $(703) |
| Net loss | (6,927) | (1,293) |
| Basic and diluted net loss per common share available to common stockholders | $(6.14) | $(7.80) |

For the three months ended March 31, 2025, net loss from continuing operations increased to $6.9 million from $0.7 million for the three months ended March 31, 2024, reflecting the inclusion of Beeline’s results of operations for 2025.

***Interest Expense.*** Interest expense, exclusive of the warehouse line of credit, was $1.9 million and $0.2 million for the three months ended March 31, 2025 and 2024, respectively, primarily related to the amortization of debt and warrant related expenses.

***Preferred stock dividends.*** Preferred stock dividends for 2025 were unchanged compared to 2024 at $37,500.

***Deemed dividend - preferred stock Series G and warrant price protection.*** On March 25, 2025, the Company sold shares under the ELOC at $1.67 per share, which was less than the Series G Preferred Stock original conversion price of $5.10 per share, resulting in the reduction of the conversion price of the Series G Preferred Stock to $1.67 per share as a result of the price protection adjustment related to the conversion of the Series G Preferred Stock. Additionally, the Warrants issued in the Series G Preferred Stock offering had their exercise price reduced to $1.67 and resulted in an increase in common shares issuable upon exercise of 1,774,986 under the full price protection adjustment of the Warrants. The Company recorded a deemed dividend of $4.6 million for the three months ended March 31, 2025.

### Segment Reporting

The following discussion provides an analysis of the financial performance of each of our reportable segments consisting of Beeline Financial, Bridgetown Spirits and Corporate. We evaluate segment performance based on key financial and operational metrics, including revenue, operating income, and margin trends. The results of each segment are presented in accordance with our internal management reporting structure.

Beeline Financial is a full service Direct-to-Consumer lender specializing in conventional conforming and non-conforming residential first-lien mortgages and providing title services. Beeline Financial also has an emerging business in anonymized data sales and technology licensing.

Bridgetown Spirits manufactures (through sub-contractors), acquires, blends, bottles, imports, markets and sells a variety of alcoholic beverages under recognized brands. Bridgetown Spirits’ brands span several alcoholic beverage categories, including whiskey, vodka, and tequila. Bridgetown Spirits sells products on a wholesale basis to distributors in one open states and through brokers in control states.

Corporate primarily consists of general corporate expenses, including public company costs, executive compensation, legal and regulatory compliance, and other administrative functions that support the overall business. This segment also includes holding company expenses, such as financing costs, investor relations, and strategic corporate initiatives that are not directly attributable to any operating segment. As this segment does not generate revenue, its financial results primarily reflect overhead, and governance-related expenditures incurred to support the company’s publicly traded status and corporate infrastructure.

*(Dollars in thousands)*

|  | Three Months Ended March 31, 2025 | 2024 |
| --- | ---: | ---: |
| Beeline Financial | $1,350 | $- |
| Bridgetown Spirits | 482 | 597 |
| **Total Revenues** | **$1,832** | **$597** |
| Beeline Financial | $(2,325) | $- |
| Bridgetown Spirits | (224) | (92) |
| Corporate | (4,378) | (611) |
| **Total net loss from continuing operations** | **$(6,927)** | **$(703)** |

### Beeline Financial (for the three months ended March 31)

*(Dollars in thousands)*

|  | 2025 |
| --- | ---: |
| Gain on sale of loans, net | $814 |
| Title fees | 376 |
| Loan origination fees | 150 |
| Interest income | 71 |
| Interest expense | (65) |
| Data and tech services | 4 |
| Total net revenues | 1,350 |
| Salaries and benefits | 1,167 |
| Marketing and advertising | 527 |
| Professional fees | 35 |
| General and administrative expenses | 495 |
| Depreciation and amortization | 795 |
| Other operating expenses | 643 |
| Total operating expenses | 3,662 |
| Loss from operations | (2,312) |
| Interest expense | (10) |
| Other expense | (3) |
| **Net loss** | **$(2,325)** |

36

For the three months ended March 31, 2025, Beeline Financial originated $39.8 million in residential mortgage loans, reported net revenues of $1.4 million and a net loss of $2.3 million.

***Gain on sale of loans, net.*** Gain on sale of loans, net consists of all components related to the origination and sale of mortgage loans, including (1) net gain on sale of loans, which represents the premium we receive in excess of the loan principal amount and certain fees charged by investors upon sale of loans into the secondary market, (2) loan origination fees, credits, points and certain costs, (3) provision for or benefit from investor reserves, and (4) the change in fair value of interest rate lock commitment (“IRLCs” or “rate lock”) and mortgage loans held for sale.

When the mortgage loan is sold into the secondary market (i.e., funded), any difference between the proceeds received and the current fair value of the loan is recognized in current period earnings in gain on sale of loans. Gain on sale of loans, net was $0.8 million for the three months ended March 31, 2025.

***Title fees.*** Title fees consist of title policy premiums and settlement fees charged to the borrower and seller on a transaction. Title fees were $0.4 million for the three months ended March 31, 2025.

***Loan origination fees.*** Loan origination fees generally include underwriting and processing fees, recording taxes, investor fees, and other related expenses. Loan origination fees were $0.2 million for the three months ended March 31, 2025.

***Loan interest income and expense.*** Interest income is interest earned on mortgage loans held for sale and interest expense is paid on our loan funding facilities. Net interest expense was nil for the three months ended March 31, 2025.

***Salaries and benefits.*** Salaries and benefits were $1.2 million for the three months ended March 31, 2025.

***Marketing and advertising.*** Marketing and advertising were $0.5 million for the three months ended March 31, 2025.

***General and administrative expenses.*** General and administrative expenses consist primarily of software service providers and were $0.5 million for the three months ended March 31, 2025.

***Depreciation and amortization.*** Depreciation and amortization expenses consist primarily of amortization related to internal-use software and was $0.8 million for the three months ended March 31, 2025.

***Other operating expenses.*** Other operating expenses consist of expenses directly related to the origination of loans and is charged by investors at the sale of loans excluding interest. Other operating expenses were $0.6 million for the three months ended March 31, 2025.

### Bridgetown Spirits

*(Dollars in thousands)*

|  | Three Months Ended March 31, 2025 | 2024 |
| --- | ---: | ---: |
| Net sales, spirits | $482 | $597 |
| Cost of sales, spirits (inclusive of depreciation) | 418 | 460 |
| Salaries and benefits | 162 | 147 |
| Marketing and advertising | 61 | 87 |
| Professional fees | 9 | - |
| General and administrative expenses | 52 | - |
| Depreciation and amortization | 4 | - |
| Total operating expenses | 706 | 694 |
| Loss from operations | (224) | (97) |
| Other income | - | 5 |
| **Net loss** | **$(224)** | **$(92)** |
| Gross profit | $64 | $137 |
| Gross margin | 13% | 23% |

37

***Net sales.*** Net sales were $0.5 million and $0.6 million for the three months ended March 31, 2025 and 2024, respectively. In 2025, Spirits sold 4,995 9-liter equivalent cases compared to 5,684 cases in the prior year, a decline of 12%.

***Cost of sales. C***ost of sales declined to $0.4 million for the three months ended March 31, 2025 from $0.5 million for the three months ended March 31, 2024 related to the decrease in net sales.

***Gross profit and Gross margin.*** Gross profit is calculated by subtracting the cost of products sold and services rendered from net sales. Gross margin is gross profit stated as a percentage of net sales.

Gross profit was $0.1 million for both the three months ended March 31, 2025 and 2024; and gross margin as a percentage of sales was 13% for the three months ended March 31, 2025 and 23% for the three months ended March 31, 2024 primarily due to lower sales volume.

***Salaries and benefits.*** Salaries and benefits were $0.2 million and $0.1 million for the three months ended March 31, 2025 and 2024, respectively.

***Marketing and advertising.*** Marketing and advertising were $0.1 million for both the three months ended March 31, 2025 and 2024.

### Corporate

*(Dollars in thousands)*

|  | Three Months Ended March 31, 2025 | 2024 |
| --- | ---: | ---: |
| Salaries and benefits | $1,002 | $203 |
| Marketing and advertising | 3 | - |
| Professional fees | 1,131 | 45 |
| General and administrative expenses | 218 | 102 |
| Depreciation and amortization | 24 | 14 |
| Other operating expenses | 8 | - |
| Total operating expenses | 2,386 | 364 |
| Interest income | 1 | - |
| Interest expense | (1,879) | (248) |
| Loss on equity method investment | (75) | - |
| Other income | 14 | 1 |
| Other expense | (53) | - |
| **Net loss** | **$(4,378)** | **$(611)** |

### Capital Resources and Liquidity

***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 revolving credit facilities will be sufficient to meet our liquidity needs.

***Liquidity.*** Our primary sources of liquidity consist of cash and cash equivalents, cash flow from our operating businesses, proceeds from asset sales and dispositions, and short-term borrowing facilities, including revolving credit lines. 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 March 31, 2025, we have $1.5 million in cash.

We do not have sufficient cash resources to meet our working capital needs for the next 12 months. Our ability to meet our ongoing operating cash needs over the next 12 months will depend, in part, on the success of Beeline Financial in expanding sales and achieving cash-positive operations. In large part, our ability to meet near-term operating cash needs will depend on our success in securing debt and/or equity financing as needed.

On December 31, 2024, the Company entered into entered into a Common Stock Purchase Agreement and related Registration Rights Agreement (collectively, the “ELOC Agreement”) with an institutional investor (the “Purchaser”) pursuant to which the Company agreed to sell, and the Purchaser agreed to purchase, up to $35 million of the Company’s common stock, subject to a sale limit of 19.99% of the outstanding shares of the Company’s common stock. On March 7, 2025, the Company entered into an Amended ELOC Agreement to reduce the amount from $35 million to $10 million. During March 2025, the Company sold and issued to the Purchaser 1,090,622 shares of common stock for a purchase price of $2.1 million. Subsequent to March 31, 2025, the Company sold and issued to the Purchaser 912,644 shares of common stock for a purchase price of $1.0 million to the Purchaser.

On April 30, 2025, the Company entered into an At The Market Offering Agreement (the “ATM Agreement”) with Ladenburg Thalmann & Co., Inc., pursuant to which the Company may issue and sell over time and from time to time, to or through Ladenburg, up to $7.0 million of shares of the Company’s common stock. During May 2025, the Company sold 22,295 shares at a weighted average of $1.37 per share for gross proceeds of $30,542.

During the three months ended March 31, 2025, the Company sold 6,417,159 shares of Series G Preferred Stock and five-year Warrants to purchase a total of 320,862 shares of common stock for total gross proceeds of $3.3 million.

We do not have sufficient capital to meet our working capital and debt obligations for the next 12 months, including debt obligations which come due in 2025. The availability of additional financing will be largely dependent on our operating success, including improved gross margins as well as operational improvements, which will be necessary to attract investors.

The Company intends to continue raising capital through a combination of equity and debt financing to meet its internal cash requirements and to refinance its existing obligations. However, there can be no assurance that the Company will be successful in securing the necessary capital on favorable terms, or at all. The Company has no material off-balance sheet arrangements as of the date of this filing.

***Statements of Cash Flows.*** For 2025, our primary capital requirements have been for cash used in operating activities and for the repayment of debt. Funds for our cash and liquidity needs have historically not been generated from operations but rather from short-term credit in the form of extended payment terms from suppliers as well as proceeds from loans and the sale of convertible debt and equity. We have been dependent on raising capital from debt and equity financing to meet our operating needs.

For the three months ended March 31, 2025, net cash used in operating activities of continuing operations was $1.5 million compared to net cash provided by operating activities of $0.1 million for the three months ended March 31, 2024 primarily due to the inclusion of Beeline’s net loss of $2.3 million for the three months ended March 31, 2025.

For the three months ended March 31, 2025, net cash used in investing activities of continuing operations was $0.1 million. For the three months ended March 31, 2024, investing activities were nil.

For the three months ended March 31, 2025, net cash provided by financing activities of continuing operations was $1.8 million primarily from equity transactions and repayments of warehouse line and secured credit facilities. For the three months ended March 31, 2024, financing activities were nil.

### 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 financial statements for three months ended March 31, 2025 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 using observable market information such as the investor commitment, assignment of trade or other mandatory delivery commitment prices. The fair value of mortgage loans held for sale not committed to investors is based on quoted best execution secondary market prices. If no such quoted price exists, the fair value is determined using quoted prices for a similar asset or assets, such as Mortgage-Backed Securities (“MBS”) prices, adjusted for the specific attributes of that loan, which would be used by other market participants. Mortgage loans held for sale not calculated using observable market information are based on third-party broker quotations or market bid pricing.

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. Additionally, reserves are established for estimated liabilities from the need to repay, where applicable, a portion of the premium received from investors on the sale of certain mortgage loans if such loans are repaid in their entirety within a specified period after the sale of the loans. The Company has established a reserve for potential losses related to these representations and warranties. In assessing the adequacy of the reserve, management evaluates various factors, including actual write-offs during the period, historical loss experience, known delinquent and other problem loans, and economic trends and conditions in the industry. Actual losses incurred are reflected as write-offs against the loan indemnification reserve.

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”.

#### Title Fees

Commissions earned at loan settlement on insurance premiums paid to title insurance companies.

#### 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 based on a percentage of the original principal loan balance 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.

#### Data and Tech

Fees received from a marketing partner that is embedded in the Company’s point-of-sale journey for investment property customers. The partner pays Beeline for leads they receive from a customer opting in to use their insurance company for landlord insurance during the application process.

#### Net Sales, Spirits

Net sales include product sales, less excise taxes and customer programs and incentives. Bridgetown Spirits recognizes revenue by applying the following steps in accordance with ASC 606 – *Revenue from Contracts with Customers*: (1) identify the contract with a customer; (2) identify the performance obligations in the contract; (3) determine the transaction price; (4) allocate the transaction price to each performance obligation in the contract; and (5) recognize revenue when each performance obligation is satisfied.

Bridgetown Spirits recognizes spirits sales when merchandise is shipped from a warehouse directly to wholesale customers (except in the case of a consignment sale). For consignment sales, which include sales to the Oregon Liquor Control Commission, sales are recognized upon the consignee’s shipment to the customer. Postage and handling charges billed to customers are also recognized as sales upon shipment of the related merchandise. Shipping terms are generally FOB shipping point, and title passes to the customer at the time and place of shipment or purchase by customers at a retail location. For consignment sales, title passes to the consignee concurrent with the consignee’s shipment to the customer. The customer has no cancellation privileges after shipment or upon purchase at retail locations, other than customary rights of return.

Excise Taxes - Bridgetown Spirits is responsible for compliance with the Alcohol and Tobacco Tax and Trade Bureau (“TTB”) regulations, which includes making timely and accurate excise tax payments. Bridgetown Spirits is subject to periodic compliance audits by the TTB. Individual states also impose excise taxes on alcoholic beverages in varying amounts. Bridgetown Spirits calculates its excise tax expense based upon units produced and on its understanding of the applicable excise tax laws, and these amounts are recorded as reductions to net sales.

Customer Programs - Customer programs, which include customer promotional discount programs, are a common practice in the alcoholic beverage industry. Bridgetown Spirits reimburses wholesalers for an agreed amount to promote sales of products and to maintain competitive pricing. Amounts paid in connection with customer programs are recorded as reductions to net sales in accordance with ASC 606.

***Derivative financial instruments and revenue recognition.*** The Company holds and issues derivative financial instruments such as IRLCs. IRLCs are subject to price risk primarily related to fluctuations in market interest rates. To hedge the interest rate risk on certain IRLCs, the Company enters into best effort forward sale commitments with investors, whereby certain loans are locked with a borrower and simultaneously committed to an investor at a fixed price. If the best effort IRLC does not fund, the Company has no obligation to fulfill the investor commitment.

ASC 815-25, *Derivatives and Hedging*, requires that all derivative instruments be recognized as assets or liabilities on the consolidated balance sheets at their fair value. Changes in the fair value of the derivative instruments are recognized in gain on sale of loans, net on the consolidated statements of operations in the period in which they occur. The Company accounts for all derivative instruments as free-standing derivative instruments and does not designate any for hedge accounting.

***Inventories.*** Bridgetown Spirits’ inventories primarily consist of bulk and bottled liquor and merchandise and are stated at the lower of cost or market. Cost is determined using an average costing methodology, which approximates cost under the first-in, first-out method. A portion of the inventory is held by certain independent distributors on consignment until it is sold to a third party. Bridgetown Spirits regularly monitors inventory quantities on hand and records write-downs for excess and obsolete inventories based primarily on the estimated forecast of product demand and production requirements. Such write-downs establish a new cost basis of accounting for the related inventory.

***Business Combination.*** The Company accounts for business combinations in accordance with ASC 805, *Business Combinations*. Under this guidance, the Company allocates the purchase price of an acquired business to the identifiable assets acquired and liabilities assumed at their estimated fair values as of the acquisition date. The excess of the purchase price over the estimated fair value of net assets acquired is recorded as goodwill.

Goodwill represents the excess purchase price over the fair value of the tangible net assets and intangible assets acquired in the business combination. The increases or decreases in the fair value of the Company’s assets and liabilities can result from changes in fair values as of the acquisition date as determined during the one-year measurement period under ASC 805.

***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.*** Property and equipment, including leasehold improvements and internal-use software, are recorded at cost, and are depreciated or amortized using the straight-line method over the estimated useful lives of the related assets, which range from three to seven years. Repair and maintenance costs are expensed as incurred. Leasehold improvements are amortized over the shorter of the lease term or the improvement’s estimated useful life. Depreciation is not recorded on projects-in-process until the project is complete and the associated assets are placed into service or are ready for the intended use. Impairment of property and equipment than the internal-use software is evaluated under ASC 360, *Property, Plant, and Equipment.*

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.

***Stock-based compensation.*** The Company recognizes as compensation expense all stock-based awards issued to employees. The compensation cost is measured based on the grant-date fair value of the related stock-based awards and is recognized over the service period of stock-based awards, which is generally the same as the vesting period. The fair value of stock options is determined using the Black-Scholes valuation model, which estimates the fair value of each award on the date of grant based on a variety of assumptions including expected stock price volatility, expected terms of the awards, risk-free interest rate, and dividend rates, if applicable. Stock-based awards issued to nonemployees are recorded at fair value on the measurement date and recognized over the service periods.

## Market risk

As filed, 139 characters.

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.

## Controls and procedures

As filed, 1,452 characters.

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 effective as of March 31, 2025.

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 March 31, 2025, that materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

## Risk factors

As filed, 159 characters.

There have been no material changes in our risk factors from those previously disclosed in our annual report on Form 10-K for the year ended December 31, 2024.

Filed May 20, 2025.
Source: SEC EDGAR, the filing index for accession 0001641172-25-011724. Last ingested by Listed: Nov 2, 2026, 08:29 ET. No prices; not investment advice.