Company: BLNE
Filing Date: 2025-04-15
Form Type: 10-K
Source: 0001641172-25-004793
Chunk: 902

Company: Beeline Holdings, Inc.
Filing Date: 2025-04-15
Form: 10-K
Item: Item 5
Chunk 902
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 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.

DERIVATIVE FINANCIAL INSTRUMENTS AND REVENUE RECOGNITION

The Company holds and issues derivative financial
instruments such as interest rate lock commitments (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. Changes
in