Company: BLNE
Filing Date: 2025-04-15
Form Type: 10-K
Source: 0001641172-25-004793
Chunk: 60

Company: Beeline Holdings, Inc.
Filing Date: 2025-04-15
Form: 10-K
Item: Item 1
Chunk 60
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our products, as we rely significantly on them for product placement and retail store penetration. In many key states, we have signed
contracts that greatly limit our ability to replace and pursue recourse with distributor partners that fail to meet their obligations.
We cannot assure you that our U.S. distributors will commit sufficient time and resources to promote and market our brands and product
lines. If they do not, our sales will be harmed, resulting in a decline in our results of operations.

Failure of our products to secure
and maintain listings in the control states would result in a decline in revenue.

In the control states, the state
liquor commissions act in place of distributors and decide which products are to be purchased and offered for sale in their respective
states. Products selected for listing in control states must generally reach certain sales volumes and/or profit levels to maintain their
listings. Products in control states are selected for purchase and sale through listing procedures, which are generally made available
to new products only at periodically scheduled listing interviews. Products not selected for listings can only be purchased by consumers
in the applicable control state through special orders, if at all. If, in the future, we are unable to maintain our current listings in
the control states, or secure and maintain listings in those states for any additional products we may develop or acquire, sales of our
products could decrease significantly, which would have a material adverse financial effect on our results of operations and financial
condition.

Failure to maintain adequate
inventory levels would negatively impact operational profitability.

We maintain inventories of our
product aging in barrels, as well as inventory needed to meet customer delivery requirements. We have used our barreled spirits inventory
at market value as collateral in the Company’s financing. If we do not make timely payments on our financing obligations, or we
breach our covenants in any financing document, including maintaining loan-to-value ratios, the lenders may foreclose and take possession
of our inventory. In addition, this inventory is always at risk of loss due to theft, fire, evaporation, spoilage, or other damage, and
any such loss, whether insured against or not, could cause us to fail to meet our orders and harm our sales and operating results. Also,
our inventory may become obsolete as we introduce new products, cease to produce old products or modify the design of our products’
packaging, which would increase our operating losses and negatively impact our results of operations.

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We have been unsuccessful in
launching new products and recent