Company: BLNE
Filing Date: 2025-05-20
Form Type: 10-Q
Source: 0001641172-25-011724
Chunk: 164

Company: Beeline Holdings, Inc.
Filing Date: 2025-05-20
Form: 10-Q
Item: Part I, Item 2
Chunk 164
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 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 the 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.

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