Company: BLNE
Filing Date: 2025-04-15
Form Type: 10-K
Source: 0001641172-25-004793
Chunk: 59

Company: Beeline Holdings, Inc.
Filing Date: 2025-04-15
Form: 10-K
Item: Item 1
Chunk 59
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 supply partner Agaveros Unidos de Amatitan, SA. de CV, which if not done, will likely result in deteriorating performance of
our Azuñia brand.

We have a long-term exclusive agreement
with Agaveros Unidos de Amatitan, SA. de CV (“Agaveros Unidos”) for the Azuñia Tequila brand. The termination of our
relationship or an adverse change in the terms of our arrangement with Agaveros Unidos could have a negative impact on our business. If
Agaveros Unidos increases its prices, we may not be able to secure alternative suppliers, and may not be able to raise the prices of our
products to cover all or even a portion of the increased costs. Also, any failure by Agaveros Unidos to perform satisfactorily or handle
increased orders, or delays in shipping, could cause us to fail to meet orders for our products, lose sales, incur additional costs and/or
expose us to product quality issues. In turn, this could cause us to lose credibility in the marketplace and damage our relationships
with distributors, ultimately leading to a decline in our business and results of operations. If we are not able to renegotiate these
contracts on acceptable terms or find suitable alternatives, our business, financial condition or results of operations could be negatively
impacted.

Failure of our distributors
to distribute our products adequately within their territories or any “under-investment” by our distributors in our brands
could result in deteriorating operating performance.

We currently distribute our Spirits
products in seven states. We are required by law to use state-licensed distributors or, in certain states known as “control states,”
state-owned agencies to sell our products to retail outlets, including liquor stores, bars, restaurants and national chains in the United
States. We have established relationships for our brands with a limited number of wholesale distributors. In the past two years, at least
one distributor has significantly reduced its investment in our spirits brands, which had an adverse effect our business, sales and growth.
We have engaged new distributors; however they do not have the same scale as the former distributor.

Over the past decade, there has
been increasing consolidation in production, distribution, and retail (the three tiers of the current system) that challenges the growth
of small businesses in the marketplace. Our distributors also distribute competitive brands for much larger companies with significant
pricing power. The ultimate success of our products depends in large part on our distributors’ ability and desire to distribute