Company: BLNE
Filing Date: 2025-05-20
Form Type: 10-Q
Source: 0001641172-25-011724
Chunk: 91

Company: Beeline Holdings, Inc.
Filing Date: 2025-05-20
Form: 10-Q
Item: Part I, Item 8
Chunk 91
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On
February 7, 2024, MagicBlocks, Inc., a Delaware corporation, was incorporated by a third party. On July 31, 2024, the Company was
issued 4.3
million shares of Magic Blocks representing ownership interest of 47.6%. The Company has determined that its investment in MagicBlocks is subject to the equity method of accounting in
accordance with ASC 825-10, Financial Instruments. As of March 31, 2025, the Company recorded a loss on equity method
investment of $0.1
million.

DEPOSITS

Deposits
are included in other assets and include security deposits for leased office spaces, which are refundable to the Company upon expiration
of the lease agreements.

MARKETING
AND ADVERTISING COSTS

Marketing
and advertising costs are expensed as incurred. For the three months ended March 31, 2025 and 2024, marketing and advertising expenses
were $0.6 million
and $0.1 million,
respectively.

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.

    14

Beeline
Holdings, Inc.

Notes
to Consolidated Financial Statements

March
31, 2025

(Unaudited)

INCOME
TAXES

The
Company accounts for income taxes in accordance with ASC 740, Income Taxes, which requires the recognition of deferred income
taxes for differences between the basis of assets and liabilities for financial statement and income tax purposes. The deferred tax assets
and liabilities represent the future tax return consequences of those differences, which will either be taxable or deductible when the
assets and liabilities are recovered or settled. Valuation allowances are established when necessary to reduce deferred tax assets to
the amount expected to be realized.

The