Company: BLNE
Filing Date: 2025-04-15
Form Type: 10-K
Source: 0001641172-25-004793
Chunk: 204

Company: Beeline Holdings, Inc.
Filing Date: 2025-04-15
Form: 10-K
Item: Item 1A
Chunk 204
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 could significantly impact Beeline’s business operations and financial
condition.

Future AI or technology characteristics
and regulations could negatively impact Beeline’s business and use of technology.

Beeline’s business model
and competitive edge requires the use of AI and various technologies to process loans and service its customers. While there is currently
no federal legislation regarding AI, it is possible that new federal legislation regarding AI may be adopted, which could negatively impact
Beeline’s business operations. Further, any new regulations regarding technology or AI that impact Beeline’s business would
increase its compliance costs and risks of regulatory proceedings against it. Should Beeline be unable to comply with any applicable technology
or AI regulations, its business operations, financial condition and results of operation will be adversely affected. In addition, Beeline
uses an AI product developed by MagicBlocks, a company in which Beeline has a minority interest. If Beeline is unable to use this AI product
in the future, Beeline may experience additional costs and business disruptions.

In addition, the emergent nature
of AI presents numerous risks and uncertainties, including the potential for defects in the design and development of the technologies
used to automate processes, misapplication of technologies, the reliance on data, rules or assumptions that may prove inaccurate, incomplete
or inadequate, information security vulnerabilities and failure to meet customer expectations. For example, the use of AI algorithms may
give rise to operational or legal issues due to perceived or actual unintentional bias in the processing and servicing of mortgage loans.
While we aim to use and to partner with organizations that use AI responsibly, we or organizations with whom we do business may be unsuccessful
in identifying or resolving issues before they arise or navigating the complex and evolving landscape inherent in AI and other novel technologies,
including regulatory implications and competitive forces. We and many of our competitors and other market participants are beginning to
deploy AI and machine learning technology into a growing number of systems and processes. As such, our ability to successfully adopt,
implement, maintain and oversee AI and other technological advancements into our processes efficiently and effectively, and to establish
systems and protocols and otherwise prepare for and address the myriad of potential issues that could arise with respect thereto, will
impact our future competitiveness and operating results and capabilities, and any failure to do so by us and our strategic partners could
materially adversely affect our business and prospects.

32

Further, if the content, analyses,
or recommendations that the AI uses to assist Beeline in processing loans and servicing customers are or are alleged to be deficient