Company: BLNE
Filing Date: 2025-01-17
Form Type: PRE 14A
Source: 0001493152-25-002779
Chunk: 97

Company: Beeline Holdings, Inc.
Filing Date: 2025-01-17
Form: PRE 14A
Chunk 97
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 of sales consists of all direct costs for raw materials, labor, overhead, packaging, and in-bound freight charges. Cost of sales declined by 21% from the first nine months of 2023 to the first nine months of 2024, despite the 32% decline in sales. The discrepancy primarily reflected the inefficiency of our operations when sales decline – the lease for our warehouse, for example, is a fixed cost.

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Gross profit was $0.5 million and $1.0 million for the nine months ended September 30, 2024 and 2023, respectively. Gross margin was 25% and 34% for the nine months ended September 30, 2024 and 2023, respectively. Gross profit and gross margin decreased for the nine months ended September 30, 2024 primarily due to the bulk spirit sales during the nine months ended September 30, 2023, which involve much lower cost of sales.

Sales and marketing expenses were $0.7 million and $1.2 million for the nine months ended September 30, 2024 and 2023. The principal reason for the reduction was management’s determination to reduce headcount and enable the spirits division to achieve sustainable operating results. General and administrative expenses were $1.1 million and $1.3 million for the nine months ended September 30, 2024 and 2023, with the reduction primarily attributable due to a reversal of $0.1 million related to compensation expense in the third quarter of 2023.

On September 29, 2023, we issued an entity 296,722 shares of common stock and 200,000 shares of Series C. In exchange for that equity, our debts to the members of the entity were reduced by a total of $6.5 million. As a result of that transaction, we recognized a non-cash loss on the debt to equity conversion of $1.3 million.

Net loss was $2.3 million and $3.6 million for the nine months ended September 30, 2024 and 2023, respectively. As noted above, our operating results were generally better during the nine months ended September 30, 2023, but were diminished by the loss on debt to equity conversion.

Year Ended December 31, 2023 Compared to the Year Ended December 31, 2022

Spirits sales were $4.0 million and $8.7 million for the years