Company: BLNE
Filing Date: 2025-11-14
Form Type: 10-Q
Source: 0001493152-25-023462
Chunk: 79

Company: Beeline Holdings, Inc.
Filing Date: 2025-11-14
Form: 10-Q
Item: Part I, Item 1
Chunk 79
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partner pays Beeline for leads they receive from a customer opting in to use their insurance company for landlord insurance during the
application process.

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. The Company
issues IRLCs to originate mortgage loans and the fair value of the IRLCs, adjusted for the probability that a given IRLC will close
and fund, is recognized in gain on sale of loans, net on the consolidated statements of operations. Subsequent changes in the fair value
of the IRLC are measured at each reporting period within gain on loans, net until the loan is funded. The Company accounts for all derivative
instruments as free-standing derivative instruments and does not designate any for hedge accounting.

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. The excess of the purchase price over the estimated fair value of net assets
acquired is recorded as goodwill.

Goodwill
represents the excess purchase price over the fair value of the tangible net assets and intangible assets acquired in the business combination.
The increases or decreases in the fair value of the Company’s assets and liabilities can result from changes in fair values as
of the acquisition date as determined during the one-year measurement period under ASC 805.

Goodwill.
Goodwill is the excess of the purchase price over the estimated fair value of identifiable net assets acquired in business combinations.
The Company tests goodwill for impairment annually in the fourth quarter, or more frequently when indications of potential impairment
exist. The Company monitors the existence of potential impairment indicators throughout the fiscal year. The Company may elect to perform
either a qualitative test or a quantitative test to determine if it