Company: BLNE
Filing Date: 2025-01-03
Form Type: S-1/A
Source: 0001493152-25-000284
Chunk: 26

Company: Beeline Holdings, Inc.
Filing Date: 2025-01-03
Form: S-1/A
Chunk 26
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 operations.

Risks Related to Beeline’s Operations and Financial Results

If the United States experiences rising mortgage interest rates, it may continue to negatively impact Beeline’s business and loan origination volumes, and the negative impact could intensify in the future particularly if an economic downturn or recession results .

Mortgage interest rates have continually increased since 2021 until a dip in September 2024; since then, 30-year rates have been increasing. It is difficult to predict the direction of interest rates. Following the Federal Reserve’s lowering of interest rates by a half-point in September 2024, in the week ended October 25 th, the 30-year average rate rose and was 60 basis points above the mid-September decrease. Then, on November 7 th, the Federal Reserve reduced rates by a quarter-point. But in the week ended November 22 nd, 30-year rates increased to the highest level since July 2024. By December 1, 2024, rates started easing again, with the 30-year mortgage rate around 6.45%, which was down approximately 15 basis points from the week prior.

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The effect of the increased mortgage rates was to reduce loan volume, margins, revenue, and profitability in the mortgage origination industry, including in Beeline’s business. Following the September decrease, Beeline experienced its best origination month in terms of units closed since March of 2022 and best origination month in terms of volume since October 2021. While the market is predicting that interest rates will decline further in 2024 and possibly in 2025, such predictions offer no assurance of returning to pre-2021 loan origination volumes. If mortgage interest rates continue to rise, fewer individuals may pursue home ownership or refinance, and the decreased profitability and loan originations will negatively impact Beeline’s business operations.

In addition, higher interest rates come with an increased probability for an economic downturn or recession by making it more difficult for businesses to borrow money and individuals to maintain employment. Future economic downturns and recessions may negatively impact the real estate market and the demand for Beeline’s services, which in turn would have a material adverse effect on its business and operating results. Because of the high purchase prices for homes relative to other items that may be purchased in the market, the real estate market tends to be particularly hard hit during economic downturns or recessions, and Beeline cannot predict the impact such an event could have on Beeline or the industry in