Company: BLNE
Filing Date: 2025-04-15
Form Type: 10-K
Source: 0001641172-25-004793
Chunk: 39

Company: Beeline Holdings, Inc.
Filing Date: 2025-04-15
Form: 10-K
Item: Item 1
Chunk 39
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 may
negatively impact its financial condition and results of operations.

If the United States experiences
rising mortgage interest rates, it may continue to negatively impact Beeline’s business and loan origination volumes, and the negative
impact could intensify in the future particularly if an economic downturn or recession results.

Mortgage interest rates continually
increased since 2021 until a dip in September 2024. It is difficult to predict the direction of interest rates. In 2025, there has been
a small decrease in rates which are relatively stable and under 7%.

The effect of the increased mortgage
rates was to reduce loan volume, margins, revenue, and profitability in the mortgage origination industry, including in our business.
Following the September decrease, Beeline experienced its best origination month in terms of units closed since March of 2022 and best
origination month in terms of volume since October 2021. While some industry participants are predicting that interest rates could decline
further in 2025, such predictions could prove to be incorrect, and in any case offer no assurance of returning to pre-2021 loan origination
volumes. An increase in interest rates may cause a reduction in demand for our offerings and/or increased delinquency default and foreclosure,
which may adversely affect our business by increasing our expenses and reducing the number of mortgage service fees that are collected.
Furthermore, interest rates depend on action taken by the Federal Reserve, which in turn depends on the current state of inflation and
the U.S. economy. The recent impositions of tariffs by the U.S. and any retaliatory actions by foreign countries could contribute to higher
inflation and reduced economic activity for a prolonged period of time, thereby delaying any rate reductions or potentially resulting
in rate increases in the future, as well as reduced demand for mortgages. If mortgage interest rates rise, fewer individuals may pursue
home ownership or refinance, and the decreased profitability and loan originations will negatively impact Beeline’s business operations,
operating results and financial condition.

In addition, higher interest rates
come with an increased probability for an economic downturn or recession by making it more difficult for businesses to borrow money and
individuals to maintain employment. Contributing further to an increased probability for a recession or economic downturn in the U.S.
in the near term are recent and threatened tariffs, trade wars, geopolitical conflicts, increased unemployment including due to widescale
layoffs and staff reductions in the federal government, and volatility and declines in the stock market,