Company: BLNE
Filing Date: 2025-04-15
Form Type: 10-K
Source: 0001641172-25-004793
Chunk: 373

Company: Beeline Holdings, Inc.
Filing Date: 2025-04-15
Form: 10-K
Item: Item 1B
Chunk 373
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own Spirits recognizes revenue by applying the following steps in accordance with ASC 606
– Revenue from Contracts with Customers: (1) identify the contract with a customer; (2) identify the performance obligations
in the contract; (3) determine the transaction price; (4) allocate the transaction price to each performance obligation in the contract;
and (5) recognize revenue when each performance obligation is satisfied.

Bridgetown Spirits recognizes spirits sales when merchandise
is shipped from a warehouse directly to wholesale customers (except in the case of a consignment sale). For consignment sales, which include
sales to the Oregon Liquor Control Commission, sales are recognized upon the consignee’s shipment to the customer. Postage and handling
charges billed to customers are also recognized as sales upon shipment of the related merchandise. Shipping terms are generally FOB shipping
point, and title passes to the customer at the time and place of shipment or purchase by customers at a retail location. For consignment
sales, title passes to the consignee concurrent with the consignee’s shipment to the customer. The customer has no cancellation
privileges after shipment or upon purchase at retail locations, other than customary rights of return.

Excise 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.

    F-12

Beeline Holdings, Inc.

Notes to Consolidated Financial Statements

December 31, 2024 and 2023

COST OF SALES, SPIRITS

Cost of sales consists of all direct costs for service,
labor, overhead, packaging, and in-bound freight charges. Raw materials account for the largest portion of the cost of sales, followed
by packaging and production costs.

DERIV