Company: BLNE
Filing Date: 2025-04-15
Form Type: 10-K
Source: 0001641172-25-004793
Chunk: 42

Company: Beeline Holdings, Inc.
Filing Date: 2025-04-15
Form: 10-K
Item: Item 1
Chunk 42
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 in guarantee fees or changes to their structure or increases in the premiums the Company is required
to pay to the FHA, VA or private mortgage insurers for insurance or for guarantees could increase loan production costs and insurance
premiums for its customers. Additionally, as the Trump Administration continues to pursue reductions in spending by the federal government,
it could take action which adversely affects VA loan programs or other programs or organizations on which certain of our operations depend,
which could have a material adverse effect on us. These industry changes could negatively affect demand for our mortgage product offerings
and consequently for conforming loans its production volume, which could materially and adversely affect its business. We cannot predict
whether the impact of any proposals to move Fannie Mae and Freddie Mac out of conservatorship would require them to increase their fees.

27

Risks Related to Our Debt and Warehouse Credit
Lines

Because we rely on indebtedness
to fund our mortgage operations and growth objectives, its future results of operations and financial condition are subject to numerous
risks arising from its incurring this indebtedness.

Old Beeline has incurred in the
past, and we expect to incur in the future, a high level of indebtedness to finance operations. We may be unable to timely repay our debt
in accordance with the terms of the debt, which could lead to legal proceedings being instituted against our subsidiary. In particular,
we engage in warehouse borrowing to provide the capital to originate loans. Warehouse lending is essentially a line of credit issued by
a lender that permits us to borrow funds on a short-term basis. We use the warehouse loan to originate loans which we resell on the secondary
market and then use the proceeds of the sale to reduce the line of credit as well as provide working capital.

Borrowings under the warehouse
lines of credit are at variable rates of interest, which also expose us to interest rate risk. If interest rates increase, our debt service
obligations on certain of its variable-rate indebtedness will increase even though the amount borrowed remains the same, and our net losses
will increase and cash flows, including cash available for servicing our indebtedness, will correspondingly decrease, which will negatively
impact our financial condition and potential business operations.

For more information on our other
debt, see the risk factor titled “We have substantial indebtedness which becomes due and payable in the near future, and if we are
unable to repay this indebtedness as and when it comes due, it could materially adversely affect our business and your investment in us”
on