Company: BLNE
Filing Date: 2025-11-14
Form Type: 10-Q
Source: 0001493152-25-023462
Chunk: 101

Company: Beeline Holdings, Inc.
Filing Date: 2025-11-14
Form: 10-Q
Item: Part I, Item 8
Chunk 101
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., 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 September 30, 2025,
the Company had an equity method investment of $0.

The
Company entered into Simple Agreements for Future Equity (“SAFEs”) with MagicBlocks. These SAFEs provide the Company with
the right to receive equity in MagicBlocks upon the occurrence of specified future events, such as a qualified financing, change in control,
or liquidation, as defined in the Agreements. The Company’s investment of $0.5 million has been recorded based on the cost method
of accounting and included in other assets on the consolidated balance sheet as of September 30, 2025. The Company evaluates the investments
for any indications of impairment in value on a quarterly basis and as such, none were identified to indicate impairment during the nine
months ended September 30, 2025. 

In
March 2025, the Company entered into a Master Services Agreement with MagicBlocks, as amended on August 27, 2025, whereby MagicBlocks
provides the Company certain services as outlined in the Statement of Work for a monthly service fee of $10,000.

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 nine months ended September 30, 2025 and 2024, marketing and advertising expenses
were $2.0 million and $0, 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