Company: BLNE
Filing Date: 2025-05-20
Form Type: 10-Q
Source: 0001641172-25-011724
Chunk: 15

Company: Beeline Holdings, Inc.
Filing Date: 2025-05-20
Form: 10-Q
Item: Part I, Item 1
Chunk 15
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 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.

INVENTORIES

Bridgetown
Spirits’ inventories primarily consist of bulk and bottled liquor and merchandise and are stated at the lower of cost or market.
Cost is determined using an average costing methodology, which approximates cost under the first-in, first-out method. A portion of inventory
is held by certain independent distributors on consignment until it is sold to a third party. Bridgetown Spirits regularly monitors inventory
quantities on hand and records write-downs for excess and obsolete inventories based primarily on the estimated forecast of product demand
and production requirements. Such write-downs establish a new cost basis of accounting for the related inventory.

ACCOUNTS
RECEIVABLE

Accounts
receivable consist primarily of amounts due from customers for goods shipped or 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.

ACCOUNTS
RECEIVABLE FACTORING PROGRAM

The
Company has an accounts receivable factoring program that had a zero balance as of March 31, 2025 and December 31, 2024. Under the program,
the Company has the option to sell certain customer account receivables in advance of payment for 75% of the amount due. When the customer
remits payment, the Company receives the remaining balance. Interest is charged on the advanced 75% payment at a rate of 2.4% for the
first 30 days plus 1.44% for each additional ten-day period. Under the terms of the agreement, the factoring provider had full recourse
against the Company should the customer fail to pay the invoice. In accordance with ASC Topic 860 – Transfers and Servicing,
the Company has concluded that the agreement has met