Company: BLNE
Filing Date: 2025-08-14
Form Type: 10-Q
Source: 0001641172-25-024044
Chunk: 7

Company: Beeline Holdings, Inc.
Filing Date: 2025-08-14
Form: 10-Q
Item: Part I, Item 8
Chunk 7
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 the
application process.

DERIVATIVE
FINANCIAL INSTRUMENTS AND REVENUE RECOGNITION

The
Company holds and issues derivative financial instruments such as interest rate lock commitments (IRLCs). IRLCs are subject to price
risk primarily related to fluctuations in market interest rates. To hedge the interest rate risk on certain IRLCs, the Company enters
into best effort forward sale commitments with investors, whereby certain loans are locked with a borrower and simultaneously committed
to an investor at a fixed price. If the best effort IRLC does not fund, the Company has no obligation to fulfill the investor commitment.

ASC
815-25, Derivatives and Hedging, requires that all derivative instruments be recognized as assets or liabilities on the consolidated
balance sheets at their fair value. Changes in the fair value of the derivative instruments are recognized in gain on sale of loans,
net on the consolidated statements of operations in the period in which they occur. The Company accounts for all derivative instruments
as free-standing derivative instruments and does not designate any for hedge accounting.

ACCOUNTS
RECEIVABLE

Accounts
receivable consist primarily of amounts due from customers for services provided. Accounts receivable are stated at their gross outstanding
balance, net of an allowance for credit losses. The allowance for credit losses is based on a combination of factors, including historical
loss experience, aging of receivables, specific customer creditworthiness, current economic conditions, and reasonable and supportable
forecasts. The Company writes off accounts receivable when they are deemed uncollectible, and any recoveries of previously written-off
balances are recorded as a reduction to the provision for credit losses.

    10

Beeline Holdings, Inc.

Notes to Consolidated Financial Statements

June 30, 2025

(Unaudited) 

BUSINESS
COMBINATION

The
Company accounts for business combinations in accordance with ASC 805, Business Combinations. Under this guidance, the Company
allocates the purchase price of an acquired business to the identifiable assets acquired and liabilities assumed at their estimated fair
values as of the acquisition date. The excess of the purchase price over the estimated fair value of net assets acquired is recorded
as goodwill.

Goodwill
represents the excess purchase price over the fair value of the tangible net assets and intangible assets acquired in the business combination.
The increases or decreases in the fair value of the Company’s assets and liabilities can result from changes in fair values as
of the acquisition