Company: BLNE
Filing Date: 2025-01-08
Form Type: S-1/A
Source: 0001493152-25-001415
Chunk: 246

Company: Beeline Holdings, Inc.
Filing Date: 2025-01-08
Form: S-1/A
Chunk 246
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BEELINE FINANCIAL HOLDINGS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENT

September 30, 2024

(Unaudited)

Mandatory Conversion

We have provided that, if the Company completes a Change of Control or an Initial Public Offering (each, as defined in the Notes) prior to the conversion of a holder’s Note, then such Note shall convert automatically into shares of the Company’s common stock, at a price equal to 80% of, as applicable,(x) the offering price to the public in the Initial Public Offering, or (y) the price or value of the Company’s common stock in the Change of Control transaction. Alternatively, we have reduced the term of the Notes to three (3) years(from five (5) years)and provided that, if a holder’s Note remains outstanding after such three (3)-year period, then it shall automatically convert into the class or series of shares of capital stock of the Company last issued in a Non-Qualified Financing, at a per share purchase price equal to the lower of (x) 80% of the per share price paid by the investors for the shares issued in such Non-Qualified Financing, and (y) the Valuation Cap PPS.

On June 4, 2024, the Company issued 1,646,157shares of Series B preferred stock and 7,333,207shares of common stock for the conversion of all the convertible notes with a principal balance of $ 23,228,052and accrued interest payable amounting to $ 1,585,958for an aggregate amount of $ 24,814,011and in exchange for all warrants issued with the convertible notes.The common shares were valued at $ 1.50per share based on recent sales of common stock and the Series B shares were valued at $ 1.50per share since the Series B shares are convertible into an equal amount of common shares. In connection with the conversion of the debt and accrued interest and surrender of the warrants, the Company recorded a gain on extinguishment of debt of $ 11,344,207, which is reflected in other income on the accompanying unaudited consolidated statement of operations and comprehensive loss.

As of September 30, 2024 and December 31, 2023, interest of $ 0and $ 965,378has accrued on all these notes, respectively. As of September 30, 2024 and December 31, 2023