Company: BLNE
Filing Date: 2025-04-15
Form Type: 10-K
Source: 0001641172-25-004793
Chunk: 668

Company: Beeline Holdings, Inc.
Filing Date: 2025-04-15
Form: 10-K
Item: Item 3
Chunk 668
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Taxes - Bridgetown Spirits is responsible for compliance with the Alcohol and Tobacco Tax and Trade Bureau (“TTB”)
regulations, which includes making timely and accurate excise tax payments. Bridgetown Spirits is subject to periodic compliance audits
by the TTB. Individual states also impose excise taxes on alcoholic beverages in varying amounts. Bridgetown Spirits calculates its excise
tax expense based upon units produced and on its understanding of the applicable excise tax laws, and these amounts are recorded as reductions
to net sales.

Customer
Programs - Customer programs, which include customer promotional discount programs, are a common practice in the alcoholic beverage
industry. Bridgetown Spirits reimburses wholesalers for an agreed amount to promote sales of products and to maintain competitive pricing.
Amounts paid in connection with customer programs are recorded as reductions to net sales in accordance with ASC 606.

Derivative
financial instruments and revenue recognition. The Company holds and issues derivative financial instruments such as 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.

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.

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Business
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