Company: BLNE
Filing Date: 2025-04-15
Form Type: 10-K
Source: 0001641172-25-004793
Chunk: 8

Company: Beeline Holdings, Inc.
Filing Date: 2025-04-15
Form: 10-K
Item: Item 1
Chunk 8
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 which could be disruptive to Beeline’s business until it found a replacement and was able to integrate this new AI technology into Beeline’s operations. Beeline believes that other suitable sources exist, although the increased cost will reduce Beeline’s gross profit margins.

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    “Bob 2.0”: is one of the first mortgage AI chatbots, handling incoming chat-based communication through its website on a 24/7 basis and was developed by MagicBlocks. Beeline recently upgraded the original Bob chatbot (Bob 1.0) and since this upgrade, it converts conversations into applications at a rate six times more efficiently than its human loan officers, who Beeline refers to as “Loan Guides”. Beeline plans for Bob to soon start voice campaigns for generating sales activities and enhancing customer service. By the end of the second quarter of 2025, Bob is expected to start processing files. It will then process some underwriting functions by the end of the third quarter of 2025. A certain level of human interaction and involvement is needed for the mortgage process; therefore, Bob will always work in an environment that leverages AI abilities and humans when needed.

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    Licenses for software: Beeline licenses the loan origination software and customer relationship management platform from third party vendors.

Competition

Banks and other savings institutions (depositories)
have historically dominated the mortgage lending business. Their competitive advantages are financial strength, which includes the availability
of capital to fund loans, management and employee skills, experience and availability, the ability to use their financial strength to
leverage compliance costs and local visibility. Because of policy changes and shifts in the marketplace, independent mortgage lenders
(IMBs) have come back in force. By 2016, nonbank mortgage origination for the first time surpassed that of the banks. The rapid rise of
the nonbank mortgage lenders could have been possible only with the assistance of federal subsidies. In the decade from 2010 to 2020,
nonbanks effectively doubled their market share of Fannie, Freddie, and FHA lending. By 2024, IMBs had over 80% market share leaving less
than 20% for the depositories. In other market segments, such as the jumbo mortgage market, banks have continued their dominance.

Digital direct-to-consumer mortgage lending has grown
rapidly, especially post-COVID, as the trend toward remote communication and digitization of the economy accelerated. As a result, many
younger consumers demand a much