Company: BLNE
Filing Date: 2025-04-15
Form Type: 10-K
Source: 0001641172-25-004793
Chunk: 214

Company: Beeline Holdings, Inc.
Filing Date: 2025-04-15
Form: 10-K
Item: Item 1A
Chunk 214
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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.

37

We have been unsuccessful in
launching new products and recent launches have negatively impacted the rate of loss.

A component of our growth strategy
has been the addition of other brands that are complementary to our existing portfolio. Toward this end, during recent years we have launched
new services and acquired new assets. Future growth requires we continue to invest in the newly acquired businesses. The addition of new
products or businesses entails numerous risks with respect to integration and other operating issues, any of which could have a detrimental
effect on our results of operations and/or the value of our equity. These risks include, but are not limited to, the following