Company: BLNE
Filing Date: 2025-11-14
Form Type: 10-Q
Source: 0001493152-25-023462
Chunk: 19

Company: Beeline Holdings, Inc.
Filing Date: 2025-11-14
Form: 10-Q
Item: Part I, Item 1
Chunk 19
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similar assets or liabilities, or other inputs that are derived directly from, or through correlation to, observable market data at the
measurement date.

Level
3—Valuation is based on the internal models using assumptions at the measurement date that a market participant would use.

In
determining fair value measurement, Beeline uses observable inputs whenever possible. The level of a fair value measurement within the
hierarchy is dependent on the lowest level of input that has a significant impact on the measurement as a whole. If quoted market prices
are available at the measurement date or are available for similar instruments, such prices are used in the measurements. If observable
market data is not available at the measurement date, judgment is required to measure fair value.

The
following is a description of measurement techniques for items recorded at fair value on a recurring basis. There was no material items
recorded at fair value on a nonrecurring basis as of September 30, 2025 and December 31, 2024.

    12

Beeline
                                            Holdings, Inc.

Notes
to Consolidated Financial Statements

September
30, 2025

(Unaudited)

Mortgage
loans held for sale: Loans held for sale that are valued using Level 2 measurements derived from observable market data, including
market prices of securities backed by similar mortgage loans adjusted for certain factors to approximate the fair value of a whole mortgage
loan, including the value attributable to mortgage servicing and credit risk. Loans held for sale for which there is little to no observable
trading activity of similar instruments are valued using Level 3 measurements based upon dealer price quotes and internal models.

IRLCs:
The fair value of IRLCs is based on current market prices of securities backed by similar mortgage loans (as determined above under mortgage
loans held for sale), net of costs to close the loans, subject to the estimated loan funding probability, or “pull-through factor.”
Given the significant and unobservable nature of the pull-through factor, IRLCs are classified as Level 3.

Forward
commitments: Beeline’s forward commitments are valued based on quoted prices for similar assets in an active market with inputs
that are observable and are classified within Level 2 of the valuation hierarchy. There were no open forward contracts as of September
30, 2025.

DEBT
DISCOUNT

Beeline’s
debt instruments are recorded net of issuance costs (debt discount). The resulting debt discount is amortized over the term of