Company: BLNE
Filing Date: 2025-01-08
Form Type: S-1/A
Source: 0001493152-25-001415
Chunk: 82

Company: Beeline Holdings, Inc.
Filing Date: 2025-01-08
Form: S-1/A
Chunk 82
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 Total Net Revenues            |     | $                  | 3,793,946 |     |             |    |   |     | $       | 2,947,744 |     |             |    |   |

As the table above indicates, revenue from Beeline’s mortgage loan production increased by 45% in 2023 compared to 2022 while revenue from Beeline’s title operations decreased by 23% in 2023 compared to 2022. Beeline’s total net revenues for the year ended December 31, 2023 increased by 29% compared to the year ended December 31, 2022.

Funding Sources

In the ordinary course of Beeline’s operations, Beeline finances the majority of its loan volume on a short-term basis, typically less than 10 days, mainly utilizing a warehouse line of credit with a capacity of $5 million. The repayments of Beeline’s borrowings come from the revenue generated by selling its loans to a network of purchasers, which includes GSEs. Beeline had approximately $2.8 million and $6.9 million of available capacity under its warehouse facilities as of December 31, 2023 and 2022, respectively.

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Factors Affecting Beeline’s Performance

Fluctuations in Interest Rates

Changes in interest rates influence mortgage loan refinancing volumes and Beeline’s mortgage loan volumes. In a decreasing interest rate environment, mortgage loan refinance volumes typically increase. Conversely, in an increasing interest rate environment, mortgage loan refinancing volumes and home purchase volumes typically decline, with mortgage loan refinancing volumes being particularly sensitive to increasing interest rates as customers are no longer incentivized to refinance their current mortgage loans at lower interest rates. However, increasing interest rates are also indicative of overall economic growth and inflation that could generate demand for more cash-out refinancings, purchase mortgage loan transactions and home equity loans, which may partially offset the decline in rate and term refinancings resulting from a rising interest rate environment.

For many years, including in particular the year ended December 31, 2020 and the first quarter of 2021, there was a prolonged period of historically low and declining interest rates. Beginning in April 2021, the United States began experiencing a significant rise in interest rates, which increased for a variety of reasons, including inflation, increases to the federal funds rate and other monetary policy tightening, market capacity constraints and other factors, which continued in 2022 and 2023,