# EDGAR Filing Document

**Accession Number:** 0001534708
**File Stem:** 0001493152-25-023462
**Filing Date:** 2025-11
**Character Count:** 282134
**Document Hash:** 86862f1eae205cad43ba280ee1af05ab
**Contains OCR:** False
**Source Format:** 

## Filing Content

## Filing Summary
**0001493152-25-023462.hdr.sgml**: 20251114

**ACCESSION NUMBER**: 0001493152-25-023462

**CONFORMED SUBMISSION TYPE**: 10-Q

**PUBLIC DOCUMENT COUNT**: 91

**CONFORMED PERIOD OF REPORT**: 20250930

**FILED AS OF DATE**: 20251114

**DATE AS OF CHANGE**: 20251114

**FILER**: 

**COMPANY DATA:**
- **COMPANY CONFORMED NAME:** Beeline Holdings, Inc.
- **CENTRAL INDEX KEY:** 0001534708
- **STANDARD INDUSTRIAL CLASSIFICATION:** MORTGAGE BANKERS & LOAN CORRESPONDENTS [6162]
- **ORGANIZATION NAME:** 02 Finance
- **EIN:** 203937596
- **STATE OF INCORPORATION:** NV
- **FISCAL YEAR END:** 1231

**FILING VALUES:**
- **FORM TYPE:** 10-Q
- **SEC ACT:** 1934 Act
- **SEC FILE NUMBER:** 001-38182
- **FILM NUMBER:** 251485973

**BUSINESS ADDRESS:**
- **STREET 1:** 188 VALLEY STREET,
- **STREET 2:** SUITE 225
- **CITY:** PROVIDENCE
- **STATE:** RI
- **ZIP:** 02909
- **BUSINESS PHONE:** 971-888-4264

**MAIL ADDRESS:**
- **STREET 1:** 188 VALLEY STREET,
- **STREET 2:** SUITE 225
- **CITY:** PROVIDENCE
- **STATE:** RI
- **ZIP:** 02909

**FORMER COMPANY:**
- **FORMER CONFORMED NAME:** Eastside Distilling, Inc.
- **DATE OF NAME CHANGE:** 20141202

**FORMER COMPANY:**
- **FORMER CONFORMED NAME:** Eurocan Holdings Ltd.
- **DATE OF NAME CHANGE:** 20111110

?xml version='1.0' encoding='ASCII'?

**U. S. SECURITIES AND EXCHANGE COMMISSION**

**WASHINGTON, D.C. 20549**

**<u>FORM 10-Q</u>**

☒ QUARTERLY
 REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended September 30, 2025

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from ___________ to _____________

Commission File Number 001-38182

![](form10-q_001.jpg)

**BEELINE HOLDINGS, INC.**

(Name of small business issuer as specified in its charter)

---

| | |
|:---|:---|
| **Nevada** | **20-3937596** |
| (State or other jurisdiction of<br> incorporation or organization) | (I.R.S. Employer<br> Identification No.) |

---

**188 Valley Street, Suite 225**

**Providence, RI 02909**

(Address of principal executive offices, including zip code)

Registrant's telephone number, including area code: **(888) 810-5760**

Securities registered pursuant to Section 12(b) of the Act:

---

| | | |
|:---|:---|:---|
| **Common Stock, $0.0001 par value** | **BLNE** | **The Nasdaq Stock Market LLC** |
| (Title of Each Class) | (Trading Symbol) | (Name of Each Exchange on Which Registered) |

---

Securities registered pursuant to Section 12(g) of the Act: **None**

Indicate by check mark whether the registrant (1) has filed all reports required by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 day. **Yes ☒ No** ☐

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate website, if any, every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). **Yes ☒ No** ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of "large accelerated filer," "accelerated filer," "smaller reporting company" and "emerging growth company" in Rule 12b-2 if the Exchange Act.

---

| | |
|:---|:---|
| Large accelerated filer ☐ | Accelerated filer ☐ |
| Non-accelerated filer **☒** | Smaller reporting company **☒** |
| Emerging growth company **☐** |  |

---

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act. **Yes** ☐ **No ☒**

As of November 14, 2025, 27,755,039 shares of our common stock were outstanding.

**Documents Incorporated by Reference:** None.

**BEELINE HOLDINGS, INC.**

**FORM 10-Q**

**September 30, 2025**

**TABLE OF CONTENTS**

---

| | | |
|:---|:---|:---|
|  |  | Page |
| **[PART I— FINANCIAL INFORMATION](#a_001)** | **[PART I— FINANCIAL INFORMATION](#a_001)** | 3 |
| Item 1. | [Financial Statements](#a_002) | 3 |
|  | [Consolidated Balance Sheets as of September 30, 2025 (unaudited) and December 31, 2024](#a_003) | 3 |
|  | [Consolidated Statements of Operations and Comprehensive Loss for the Three and Nine Months Ended September 30, 2025 and 2024 (unaudited)](#a_004) | 4 |
|  | [Consolidated Statements of Changes In Equity for the Three and Nine Months Ended September 30, 2025 and 2024 (unaudited)](#a_005) | 5 |
|  | [Consolidated Statements of Cash Flows for the Nine Months Ended September 30, 2025 and 2024 (unaudited)](#a_006) | 6 |
|  | [Notes to the Consolidated Financial Statements (unaudited)](#a_007) | 7 |
| Item 2. | [Management's Discussion and Analysis of Financial Condition and Results of Operations](#sq_001) | 34 |
| Item 3. | [Quantitative and Qualitative Disclosures About Market Risk](#sq_002) | 47 |
| Item 4 | [Controls and Procedures](#sq_003) | 47 |
| **[PART II— OTHER INFORMATION](#sq_004)** | **[PART II— OTHER INFORMATION](#sq_004)** | 48 |
| Item 1 | [Legal Proceedings](#sq_005) | 48 |
| Item 1A | [Risk Factors](#sq_006) | 48 |
| Item 2. | [Unregistered Sales of Equity Securities and Use of Proceeds](#sq_007) | 48 |
| Item 3. | [Defaults Upon Senior Securities](#sq_008) | 48 |
| Item 4. | [Mine Safety Disclosures](#sq_009) | 48 |
| Item 5. | [Other Information](#sq_010) | 48 |
| Item 6. | [Exhibits](#sq_011) | 48 |
| **[SIGNATURES](#sig_001)** | **[SIGNATURES](#sig_001)** | 51 |

---

**PART I: FINANCIAL INFORMATION**

**ITEM 1 – FINANCIAL STATEMENTS**

**Beeline Holdings, Inc. and Subsidiaries**

**Consolidated Balance Sheets**

**(Dollars in thousands, except share and per share amounts)**

---

| | | |
|:---|:---|:---|
|  | **September 30, 2025** | **December 31, 2024** |
|  | **(Unaudited)** | |
| **Assets** |  |  |
| Current assets: |  |  |
| &nbsp;&nbsp;&nbsp;Cash and cash equivalents | $1295 | $81 |
| &nbsp;&nbsp;&nbsp;Restricted cash | 45 | 791 |
| &nbsp;&nbsp;&nbsp;Mortgage loans held for sale, net, at fair value | 8923 | 6925 |
| &nbsp;&nbsp;&nbsp;Interest rate lock commitment derivative | 240 | 18 |
| &nbsp;&nbsp;&nbsp;Accounts receivable, net | 41 |  |
| &nbsp;&nbsp;&nbsp;Prepaid expenses and other current assets | 403 | 213 |
| &nbsp;&nbsp;&nbsp;Current assets of discontinued operations held for sale | - | 2012 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total current assets | 10947 | 10040 |
| Goodwill | 33310 | 33310 |
| Property and equipment, net | 12470 | 14680 |
| Intangible assets, net | 4854 | 4927 |
| Right-of-use assets | 948 | 1334 |
| Equity method investment |  | 147 |
| Other assets, net | 652 | 608 |
| Non-current assets of discontinued operations held for sale | - | 1469 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**Total Assets** | $**63181** | $**66515** |
| **Liabilities and Equity** |  |  |
| &nbsp;&nbsp;&nbsp;Current liabilities: |  |  |
| &nbsp;&nbsp;&nbsp;Warehouse line of credit | $8423 | $6106 |
| &nbsp;&nbsp;&nbsp;Accounts payable | 864 | 1674 |
| &nbsp;&nbsp;&nbsp;Accrued liabilities | 987 | 1343 |
| &nbsp;&nbsp;&nbsp;Current portion of secured credit facilities, net of debt discount |  | 4466 |
| &nbsp;&nbsp;&nbsp;Current portion of note payable and accrued interest, related parties |  | 891 |
| &nbsp;&nbsp;&nbsp;Current portion of notes payable and accrued interest, net of debt discount |  | 840 |
| &nbsp;&nbsp;&nbsp;Current portion of lease liabilities | 178 | 339 |
| &nbsp;&nbsp;&nbsp;Current liabilities of discontinued operations held for sale | - | 492 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total current liabilities | 10452 | 16151 |
| Lease liabilities, net of current portion | 943 | 1188 |
| Other noncurrent liabilities | 45 | 45 |
| Non-current liabilities of discontinued operations held for sale | - | 163 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total liabilities | 11440 | 17547 |
| Commitments and contingencies (Note 16) |  |  |
| Equity: |  |  |
| Common stock, $0.0001 par value; 100,000,000 shares authorized, 19,747,234 and 468,950 shares issued and outstanding as of September 30, 2025 and December 31, 2024, respectively | 2 |  |
| Preferred stock Series A, $0.0001 par value; 8,425,102 shares authorized; 6,425,102 and 0 shares issued and outstanding as of September 30, 2025 and December 31, 2024, respectively | 1 |  |
| Preferred stock Series B, $0.0001 par value; 2,500,000 shares authorized; 2,500,000 shares issued and outstanding as of September 30, 2025 and December 31, 2024 |  |  |
| Preferred stock Series D, $0.0001 par value; 255,474 shares authorized; 0 and 255,474 shares issued and outstanding as of September 30, 2025 and December 31, 2024, respectively |  |  |
| Preferred stock Series E, $0.0001 par value; 200,000 shares authorized; 200,000 shares issued and outstanding as of September 30, 2025 and December 31, 2024 |  |  |
| Preferred stock Series F, $0.0001 par value; 70,000,000 shares authorized; 3,199,896 and 69,085,562 shares issued and outstanding as of September 30, 2025 and December 31, 2024, respectively |  | 7 |
| Preferred stock Series F-1, $0.0001 par value; 1,000,000 shares authorized; 23,844 and 517,775 shares issued and outstanding as of September 30, 2025 and December 31, 2024, respectively |  |  |
| Preferred stock Series G, $0.0001 par value; 15,000,000 shares authorized; 8,617,372 and 5,308,239 shares issued and outstanding as of September 30, 2025 and December 31, 2024, respectively | 1 | 1 |
| Common stock to be issued, 0 shares and 13,115 shares as of September 30, 2025 and December 31, 2024, respectively |  | 80 |
| Preferred stock Series G to be issued, 0 shares and 245,098 shares as of September 30, 2025 and December 31, 2024, respectively |  | 125 |
| Additional paid-in capital | 167670 | 141877 |
| Accumulated other comprehensive loss | (47) | (34) |
| Accumulated deficit | (115883) | (94189) |
| Equity attributable to stockholders of Beeline Holdings, Inc. | 51744 | 47867 |
| Non-controlling interest ($0 and $1,103 related to discontinued operations as of September 30, 2025 and December 31, 2024, respectively) | (3) | 1101 |
| &nbsp;&nbsp;&nbsp;**Total Equity** | 51741 | 48968 |
| &nbsp;&nbsp;&nbsp;**Total Liabilities and Equity** | $**63181**  | $**66515** |

---

The accompanying notes are an integral part of these unaudited consolidated financial statements.

**Beeline Holdings, Inc. and Subsidiaries**

**Consolidated Statements of Operations and Comprehensive Loss**

**Three and Nine Months Ended September 30, 2025 and 2024**

**(Dollars in thousands, except shares and per share amounts)**

**(Unaudited)**

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **Three Months Ended September 30,** | **Three Months Ended September 30,** | **Nine Months Ended <br> September 30,** | **Nine Months Ended <br> September 30,** |
|  | **2025** | **2024** | **2025** | **2024** |
| **Revenues** |  |  |  |  |
| Gain on sale of loans, net | $1671 | $- | $3598 | $- |
| Loan origination fees | 302 |  | 638 |  |
| Interest income (expense) |  |  |  |  |
| &nbsp;&nbsp;&nbsp;Interest income | 90 |  | 232 |  |
| &nbsp;&nbsp;&nbsp;Interest expense | (112) | - | (241) | - |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Interest income (expense), net | (22) |  | (9) |  |
| Title fees | 391 |  | 1172 |  |
| Other revenues | 2 | - | 12 | - |
| &nbsp;&nbsp;&nbsp;**Total net revenues** | **2344** | **-** | **5411** | **-** |
| **Operating Expenses** |  |  |  |  |
| Compensation, commissions and benefits | 1989 | 146 | 6323 | 509 |
| General and administrative expenses | 871 | 289 | 4119 | 640 |
| Depreciation and amortization | 831 |  | 2487 |  |
| Marketing and advertising | 682 |  | 1999 |  |
| Other operating expenses | 804 | - | 1963 | - |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**Total operating expenses** | **5177** | **435** | **16891** | **1149** |
| Loss from operations | (2833) | (435) | (11480) | (1149) |
| **Other income (expense), net** |  |  |  |  |
| &nbsp;&nbsp;&nbsp;Interest income | 4 |  | 5 |  |
| &nbsp;&nbsp;&nbsp;Interest expense | (69) | (409) | (2346) | (965) |
| &nbsp;&nbsp;&nbsp;Loss on extinguishment of debt | (685) |  | (610) |  |
| &nbsp;&nbsp;&nbsp;Change in equity method investment |  |  | 129 |  |
| &nbsp;&nbsp;&nbsp;Other | 4 | (2) | 18 | 2 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**Total other income (expense), net** | **(746)** | **(411)** | **(2804)** | **(963)** |
| Loss before income taxes | (3579) | (846) | (14284) | (2112) |
| Provision for income taxes | - | - | - | - |
| Net loss from continuing operations | (3579) | (846) | (14284) | (2112) |
| Net income (loss) from discontinued operations | 910 | (513) | 548 | (2028) |
| Net loss from disposal of discontinued operations | (1293) | - | (1293) | - |
| Net loss from discontinued operations | (383) | (513) | (745) | (2028) |
| Net loss | (3962) | (1359) | (15029) | (4140) |
| &nbsp;&nbsp;&nbsp;Net loss attributable to non-controlling interests (related to discontinued operations) | 44 | - | 214 | - |
| &nbsp;&nbsp;&nbsp;Net loss attributable to common stockholders | (3918) | (1359) | (14815) | (4140) |
| Preferred stock dividends | (38) | (38) | (113) | (113) |
| Deemed dividend - Preferred stock Series G and warrant price protection | - | - | (6766) | - |
| **Net loss available to common stockholders** | $**(3956)** | $**(1397)** | $**(21694)** | $**(4253)** |
| Comprehensive loss |  |  |  |  |
| &nbsp;&nbsp;&nbsp;Net loss | $(3962) | $(1359) | $(15029) | $(4140) |
| &nbsp;&nbsp;&nbsp;Unrealized foreign currency translation gain | (67) | - | (13) | - |
| &nbsp;&nbsp;&nbsp;Total comprehensive loss | (4029) | (1359) | (15042) | (4140) |
| Comprehensive loss attributable to non-controlling interests (related to discontinued operations) | 44 | - | 214 | - |
| **Comprehensive loss attributable to common stockholders** | $**(3985)** | $**(1359)** | $**(14828)** | $**(4140)** |
| Basic and diluted net loss from continuing operations per common share | $(0.19) | $(4.00) | $(1.38) | $(11.34) |
| Basic and diluted net loss from discontinued operations per common share | $(0.02) | $(2.42) | $(0.07) | $(10.89) |
| Basic and diluted net loss per common share available to common stockholders | $(0.20) | $(6.60) | $(2.09) | $(22.84) |
| Basic and diluted weighted average common shares outstanding | 19301805 | 211596 | 10386748 | 186168 |

---

The accompanying notes are an integral part of these unaudited consolidated financial statements.

**Beeline Holdings, Inc. and Subsidiaries**

**Consolidated Statements of Changes In Equity** 

**For the Three and Nine Months Ended September 30, 2025 and 2024**

**(Dollars in thousands, except share amounts)**

**(Unaudited)**

---

| | | | | | | | | | | | | | | | | | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|
|  | **Common Stock** | **Common Stock** | **Series A Preferred Stock** | **Series A Preferred Stock** | **Series B Preferred Stock** | **Series B Preferred Stock** | **Series C Preferred Stock** | **Series C Preferred Stock** | **Series D Preferred Stock** | **Series D Preferred Stock** | **Series E Preferred Stock** | **Series E Preferred Stock** | **Series F Preferred Stock** | **Series F Preferred Stock** | **Series F1 Preferred Stock** | **Series F1 Preferred Stock** | **Series G Preferred Stock** | **Series G Preferred Stock** | | | | | | |
|  | **Shares** | **Amount** | **Shares** | **Amount** | **Shares** | **Amount** | **Shares** | **Amount** | **Shares** | **Amount** | **Shares** | **Amount** | **Shares** | **Amount** | **Shares** | **Amount** | **Shares** | **Amount** | **Stock to be**<br>**Issued** | **Additional Paid-in**<br>**Capital** | **Accumulated**<br>**Deficit** | **Accumulated Other Comprehensive Income**<br>**(Loss)** | **Non-Controlling**<br>**Interest** | **Total**<br>**Equity** |
| **Balance, December 31, 2023** | 170599 | $&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; - | - | $&nbsp;&nbsp;&nbsp;&nbsp; - | 2500000 | $&nbsp;&nbsp;&nbsp;&nbsp; - | 200000 | $&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;- | - | $&nbsp;&nbsp;&nbsp;&nbsp; - | - | $&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; - | - | $&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;- | - | $&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; - | - | $&nbsp;&nbsp;&nbsp;&nbsp; - | $- | $83559 | $(82706) | $&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; - | $&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; - | $853 |
| Issuance of common stock for services by third parties | 176 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | 2 |  |  |  | 2 |
| Preferred stock dividends |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | (38) |  |  | (38) |
| Net loss | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | (1293) | - | - | (1293) |
| **Balance, March 31, 2024** | 170775 | $- | - | $- | 2500000 | $- | 200000 | $- | - | $- | - | $- | - | $- | - | $- | - | $- | $- | $83561 | $(84037) | $- | $- | $(476) |
| Issuance of common stock for services by employees | 5574 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | 67 |  |  |  | 67 |
| Preferred stock dividends |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | (37) |  |  | (37) |
| Net loss | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | (1488) | - | - | (1488) |
| **Balance, June 30, 2024** | 176349 | $- | - | $- | 2500000 | $- | 200000 | $- | - | $- | - | $- | - | $- | - | $- | - | $- | $- | $83628 | $(85562) | $- | $- | $(1934) |
| Shares issued for cash, net of debt discount costs | 44202 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | 392 |  |  |  | 392 |
| Common stock issued for conversion of Series C Preferred shares | 75740 |  |  |  |  |  | (82415) |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
| Warrants issued in relation to debt issuance |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | 329 |  |  |  | 329 |
| Preferred stock dividends | 17773 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | 150 | (38) |  |  | 112 |
| Net loss | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | (1359) | - | - | (1359) |
| **Balance, September 30, 2024** | 314064 | $- | - | $- | 2500000 | $- | 117585 | $- | - | $- | - | $- | - | $- | - | $- | - | $- | $- | $84499 | $(86959) | $- | $- | $(2460) |
| **Balance, December 31, 2024** | 468950 | $- | - | $- | 2500000 | $- | - | $- | 255474 | $- | 200000 | $- | 69085562 | $7 | 517775 | $- | 5308239 | $1 | $205 | $141877 | $(94189) | $(34) | $1101 | $48968 |
| Issuance of stock for services by third parties |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | 264796 |  | (125) | 125 |  |  |  |  |
| Issuance of stock related to settlement | 13115 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | (80) | 80 |  |  |  |  |
| Issuance of common stock for services by employees |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | 14 | 116 |  |  |  | 130 |
| Conversion of preferred shares | 6247126 | 1 |  |  |  |  |  |  | (188808) |  |  |  | (57020394) | (6) | (421186) |  | (3980664) |  |  | 6 |  |  |  | 1 |
| Series G Preferred Stock issued for cash, net of offering costs |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | 6417159 |  |  | 3266 |  |  |  | 3266 |
| ELOC shares issued for cash, net of offering costs | 1090622 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | 1978 |  |  |  | 1978 |
| Note payable, related party converted to preferred shares |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | 1372549 |  |  | 700 |  |  |  | 700 |
| Preferred stock dividends |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | (38) |  |  | (38) |
| Foreign currency translation adjustments |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | 17 |  | 17 |
| Deemed dividend-price protection, revaluation adjustment |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | 4588 | (4588) |  |  |  |
| Net loss | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | (6822) | - | (105) | (6927) |
| **Balance, March 31, 2025** | 7819813 | $1 | - | $- | 2500000 | $- | - | $- | 66666 | $- | 200000 | $- | 12065168 | $1 | 96589 | $- | 9382079 | $1 | $14 | $152736 | $(105637) | $(17) | $996 | $48095 |
| Issuance of common stock for services by employees | 10000 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | (14) | 14 |  |  |  |  |
| Conversion of preferred shares | 317821 |  |  |  |  |  |  |  | (66666) |  |  |  | (110729) |  | (825) |  | (400000) |  |  |  |  |  |  |  |
| ELOC shares issued for cash, net of offering costs | 3927815 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | 3889 |  |  |  | 3889 |
| ATM shares issued for cash, net of offering costs | 5540043 | 1 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | 6720 |  |  |  | 6721 |
| Secured credit facilities converted to common shares | 747221 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | 986 |  |  |  | 986 |
| Preferred stock dividends |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | (37) |  |  | (37) |
| Foreign currency translation adjustments |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | 37 |  | 37 |
| Deemed dividend-price protection, revaluation adjustment |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | 2178 | (2178) |  |  |  |
| Net loss | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | (4075) | - | (65) | (4140) |
| **Balance, June 30, 2025** | 18362713 | $2 | - | $- | 2500000 | $- | - | $- | - | $- | 200000 | $- | 11954439 | $1 | 95764 | $- | 8982079 | $1 | $- | $166523 | $(111927) | $20 | $931 | $55551 |
| Warrants issued related to settlement |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | 26 |  |  |  | 26 |
| Conversion of preferred shares | 708443 |  | (2000000) |  |  |  |  |  |  |  |  |  | (398392) |  | (2969) |  | (364707) |  |  |  |  |  |  |  |
| Series A Preferred Stock issued in exchange for Series F/F-1 Preferred Stock |  |  | 8425102 | 1 |  |  |  |  |  |  |  |  | (8356151) | (1) | (68951) |  |  |  |  |  |  |  |  |  |
| ELOC shares issued for cash, net of offering costs | 676078 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | 1121 |  |  |  | 1121 |
| Preferred stock dividends |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | (38) |  |  | (38) |
| Foreign currency translation adjustments |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | (67) |  | (67) |
| Derecognition of non-controlling interest related to discontinued operations |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | (890) | (890) |
| Net loss | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | (3918) | - | (44) | (3962) |
| **Balance, September 30, 2025** | 19747234 | $2 | 6425102 | $1 | 2500000 | $- | - | $- | - | $- | 200000 | $- | 3199896 | $- | 23844 | $- | 8617372 | $1 | $- | $167670 | $(115883) | $(47) | $(3) | $51741 |

---

The accompanying notes are an integral part of these unaudited consolidated financial statements.

**Beeline Holdings, Inc. and Subsidiaries**

**Consolidated Statements of Cash Flows**

**Nine Months Ended September 30, 2025 and 2024**

**(Dollars in thousands)**

**(Unaudited)**

---

| | | |
|:---|:---|:---|
|  | **2025** | **2024** |
| **Cash Flows From Operating Activities:** |  |  |
| Net loss | $(15029) | $(4140) |
| Net loss from discontinued operations | 745 | 2028 |
| &nbsp;&nbsp;&nbsp;Adjustments to reconcile net loss to net cash provided by (used in) operating activities |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Gain on sale mortgage loans held for sale, net of direct costs | (3598) |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Recovery for credit losses | (29) |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Depreciation and amortization | 2487 |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Loss on extinguishment of debt | 610 |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Amortization of debt discount | 1722 | 232 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Preferred stock dividends | (113) | (113) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Change in equity method investment | (129) |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Issuance of common stock for services by third parties |  | 2 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Issuance of common stock for services by employees | 130 | 67 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Warrants issued related to settlement | 26 |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Noncash lease expense | (19) |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Changes in operating assets and liabilities: |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Proceeds from principal payments and sales of loans held for sale | 98224 |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Originations and purchases of mortgage loans held for sale | (96625) |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Interest rate lock commitment derivative | (222) |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Prepaid expenses and other current assets | (115) | (185) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Accounts receivable, net | (12) |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Other assets, net | 488 |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Accounts payable | (542) | 9 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Accrued liabilities | (258) | 73 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Accrued interest, net | 154 | 610 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Other liabilities, related party |  | 81 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Other noncurrent liabilities | 1 | - |
| Net cash used in operating activities | (12104) | (1336) |
| Net cash provided by (used in) operating activities of discontinued operations | 667 | (270) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**Net cash used in operating activities** | (11437) | (1606) |
| **Cash Flows From Investing Activities:** |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Note receivable | (75) |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;SAFE | (255) |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Purchase of internal-use software | (203) | - |
| Net cash used in investing activities of continuing operations | (533) |  |
| Net cash (used in) provided by investing activities of discontinued operations | (515) | 114 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**Net cash (used in) provided by investing activities** | (1048) | 114 |
| **Cash Flows From Financing Activities:** |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Net repayments/borrowings under warehouse line of credit | 2329 |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;ELOC shares issued for cash, net of offering costs | 6988 |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;ATM shares issued for cash, net of offering costs | 6721 |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Series G Preferred Stock issued for cash, net of offering costs | 3266 |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Proceeds from common stock issued, net of issuance costs |  | 392 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Proceeds from secured credit facilities, net of debt discount |  | 1100 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Payments of principal on secured credit facilities | (5439) |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Proceeds from notes payable, related party | 672 |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Payments of principal on notes payable, related party | (796) |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Proceeds from notes payable | 250 |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Payments of principal on notes payable | (1025) | - |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**Net cash provided by financing activities of continuing operations** | 12966 | 1492 |
| **Net increase in cash** | 481 |  |
| Effect of exchange rate changes on cash | (13) |  |
| **Cash and restricted cash at the beginning of the period** | 872 | - |
| **Cash and restricted cash at the end of the period** | $1340 | $- |
| **Supplemental Disclosure of Cash Flow Information** |  |  |
| Cash paid during the period for interest | $215 | $81 |
| Operating cash flows from operating leases | $236 | $- |
| **Supplemental Disclosure of Non-Cash Investing and Financing Activities** |  |  |
| Note payable, related party converted to Preferred stock Series G | $700 | $- |
| Conversion of preferred shares | $6 | $- |
| Deemed dividend - Preferred stock Series G and warrant price protection | $6766 | $- |
| Secured credit facilities converted to common shares | $986 | $- |
| Series A Preferred Stock issued in exchange for Series F/F-1 Preferred Stock | $1 | $- |
| Dividends issued | $- | $150 |
| Warrants issued in relation to debt issuance | $- | $329 |

---

The following table provides a reconciliation of cash and cash equivalents and restricted cash reported within the consolidated balance sheet that sum to the same such amounts shown in the consolidated statement of cash flows:

---

| | | |
|:---|:---|:---|
|  | **2025** | **2024** |
| Cash and cash equivalents | $1295 | $- |
| Restricted cash | 45 | - |
| Total cash and cash equivalents and restricted cash | $1340 | $- |

---

The accompanying notes are an integral part of these unaudited consolidated financial statements.

**Beeline Holdings, Inc.**

**Notes to Consolidated Financial Statements**

**September 30, 2025**

**(Unaudited)**

**1. NATURE OF BUSINESS**

Beeline Holdings, Inc. (the "Company") was incorporated under the laws of Nevada in 2004. On March 12, 2025, the Company changed its name from Eastside Distilling, Inc.

*Merger*

On September 4, 2024, the Company entered into an Agreement and Plan of Merger and Reorganization (the "Merger") with Bridgetown Spirits Corp. ("Bridgetown Spirits") and Beeline Financial Holdings, Inc. ("Beeline Financial"), a Delaware corporation. The Merger closed on October 7, 2024 and Beeline Financial became a wholly-owned subsidiary of the Company.

Beeline Financial was incorporated in Delaware on July 1, 2020 and is the successor to a Rhode Island corporation organized in 2018. Beeline Financial is an Artificial Intelligence ("AI")-driven fintech mortgage lender that develops proprietary software in the form of major enhancements and new developments in its lending platform, introducing its Chat Application Programming Interface ("API") "Bob" in July 2023.

*Debt Exchange Agreement*

On September 4, 2024, the Company and its subsidiary, Craft Canning + Printing ("Craft C+P"), entered into a Debt Exchange Agreement (the "Debt Exchange Agreement"), which closed on October 7, 2024, resulting in the assignment by the Company of 720 barrels of spirits to Craft C+P, followed by the merger of Craft C+P into a limited liability company owned by certain creditors of the Company and the deconsolidation of Craft C+P, *see Note 4 - Discontinued Operations*.

*Bridgetown Spirits*

Subsequent to the execution of the Debt Exchange Agreement, the Company organized a subsidiary, Bridgetown Spirits, which was incorporated on October 3, 2024, and assigned the Company's business of manufacturing and marketing spirits to Bridgetown Spirits. On July 25, 2025, the Company disposed of its 53% interest in Bridgetown Spirits in exchange for the satisfaction of debt and as a result Bridgetown Spirits is no longer a subsidiary of the Company, *see Note 4 - Discontinued Operations.*

**2. GOING CONCERN, LIQUIDITY, AND MANAGEMENT'S PLANS** 

These consolidated financial statements have been prepared on a basis that assumes the Company will continue as a going concern and which contemplates the realization of assets and satisfaction of liabilities and commitments in the ordinary course of business. The Company is subject to a number of risks common to emerging companies stemming from, among other things, a limited operating history, rapid technological change, uncertainty of market acceptance and products, regulatory uncertainty, competition from substitute products and larger companies, the need to obtain additional financing, compliance with government regulation, protection of proprietary technology, interest rate fluctuations, product liability, and the dependence on key individuals. The Company has incurred recurring losses and negative cash flows from operations since its inception, and is dependent on debt and equity financing. These factors raise substantial doubt about the Company's ability to continue as a going concern for the twelve months following the issuance of these financial statements. The consolidated financial statements do not include any adjustments to the carrying amounts and classification of assets, liabilities, and reported expenses that may be necessary if assumes Company were unable to continue as a going concern.

Management believes that in order to accomplish its business plan objectives, the Company will need to either increase revenues or raise capital by the issuance of debt and/or equity; and that it will be successful in obtaining this additional financing based on its recent history of raising funds.

Subsequent to September 30, 2025, the Company expanded and diversified its warehouse lines to $25.0 million tripling its prior $5.0 million line and adding two new $5.0 million lines with new lenders in anticipation of rapid revenue growth and loan origination volume. In addition, the Company entered into a Securities Purchase Agreement with certain accredited investors in a registered direct offering raising of net proceeds of $6.6 million. The Company intends to use the net proceeds from the Offering for general corporate purposes and the redemption of outstanding shares of Series E Convertible Preferred Stock.

**Beeline Holdings, Inc.**

**Notes to Consolidated Financial Statements**

**September 30, 2025**

**(Unaudited)**

In addition to the Company increasing its legacy revenue streams, the Company is diversifying into new lines of business. On June 25, 2025, Beeline Title facilitated the closing of what it believes to be one of the first-ever fractional sale of home real estate transactions funded through the sale of a cryptocurrency with a partner who will fund these transactions through the sale of a crypto token which is backed by real property. While neither the Company, nor its subsidiaries, mints the token, Beeline Title handles the settlement and title portions of these transactions for its client, who is minting the token. In the fourth quarter of 2025, Beeline Loans began providing customer acquisition services and support to the company minting the token and offering the equity exchange transaction. The Company receives 3.5% of the amount of equity sold and markets the product through its website as BeelineEQUITY. Beeline Title will provide the title and closing services for each transaction—unless borrowers elect to use an outside title company. Importantly, Beeline Title will open this platform to all mortgage lenders, giving them access to a proven solution for cryptocurrency token transaction reconciliation, compliance, and disbursement. As cryptocurrency adoption accelerates and becomes regulated by federal and state governments, the Company is positioning itself as a leader in this fast-moving ecosystem, offering trusted infrastructure to help lenders scale into a future where crypto and compliance go hand-in-hand. The Company collaborates with a related party company which is co-owned by the Company's Chief Executive Officer, Nicholas Liuzza, by which the company funds the transactions through the sale of a cryptocurrency token which is backed by real property. *See Note 19 – Related Party Transactions*.

Beeline Labs recently launched BlinkQC, a SaaS platform that automates pre-close quality control ("QC") reviews for mortgage loan files. Beeline Loans uses BlinkQC in its own operation for its pre-close QC. Later this year, Beeline Labs plans to license BlinkQC as SaaS BlinkQC uses artificial intelligence to ingest loan document packages, extract and validate data, apply customizable rule sets, and generate compliance reports. Critical data points are being collected from the Beeline Labs launch and integrations are set to start in early December 2025 opening BlinkQC up to over 1,000 Banks and Independent Mortgage Banks. The Beeline Labs data and integrations are essential for a broader launch. Management believes BlinkQC will improve QC efficiency for mortgage lenders and represents a potential source of incremental revenue for the Company.

Despite these new lines of business, there can be no assurances that these business plans and actions will be successful, that the Company will generate anticipated revenues or operating results, or that unforeseen circumstances will not require additional funding sources in the future or effectuate plans to conserve liquidity. Future efforts to raise additional funds may not be successful or they may not be available on acceptable terms, if at all.

**3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES**

**BASIS OF PRESENTATION**

These financial statements have been prepared on the accrual basis of accounting in accordance with accounting principles generally accepted in the United States of America ("GAAP") for interim financial information and in accordance with the rules and regulations of the Securities and Exchange Commission (the "SEC"). Certain information and footnote disclosures normally included in financial statements in accordance with GAAP have been condensed or eliminated as permitted under the SEC's rules and regulations. In management's opinion, the unaudited consolidated financial statements include all material adjustments, all of which are of a normal and recurring nature, necessary to present fairly the Company's financial position as of September 30, 2025, its operating results for the three and nine months ended September 30, 2025 and 2024 and its cash flows for the nine months ended September 30, 2025 and 2024. The unaudited consolidated financial statements should be read in conjunction with the audited consolidated financial statements included in the Company's Annual Report on Form 10-K for the year ended December 31, 2024. Interim results are not necessarily indicative of the results that may be expected for an entire fiscal year. All intercompany balances and transactions have been eliminated on consolidation.

**PRINCIPLES OF CONSOLIDATION**

The consolidated financial statements include the consolidated accounts of the Company and its wholly-owned subsidiaries, Beeline Financial Holdings, Inc., Beeline Title Holdings, Inc. ("Beeline Title Holdings"), Beeline Mortgage Holdings, Inc. ("Beeline Mortgage"), Beeline Labs, Inc., and Beeline Loans Pty Ltd. ("Australian Subsidiary"). Intercompany transactions and balances have been eliminated.

**Beeline Holdings, Inc.**

**Notes to Consolidated Financial Statements**

**September 30, 2025**

**(Unaudited)**

Beeline Title Holdings has four subsidiaries, Beeline Title, LLC ("Beeline Title"), Beeline Texas Title, LLC ("Beeline Texas Title"), Beeline Settlement Services, LLC ("Beeline Settlement Services"), and Beeline Title Agency, LLC ("Beeline Title Agency"). Beeline Mortgage Holdings has one subsidiary, Beeline Loans, Inc. ("Beeline Loans").

As of September 30, 2025, the Company had one majority-owned subsidiary, Nimble Title Holdings, Inc. ("Nimble Title Holdings"), which is 50.1% owned by the Company and 49.9% owned by a former non-controlling stockholder of Beeline Financial. Nimble Title Holdings has four subsidiaries, Nimble Title, LLC ("Nimble Title"), Nimble Title Agency, LLC ("Nimble Title Agency"), Nimble Texas Title, LLC ("Nimble Texas Title"), and Nimble Settlement Services, LLC ("Nimble Settlement Services"). The operating activities of Nimble Title Holdings was de minimis for the nine months ended September 30, 2025.

**USE OF ESTIMATES**

Preparing financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenues, and expenses. Significant estimates and assumptions in these consolidated statements include: the fair value of mortgage loans held for sale, valuation of investments, valuation of accounts receivable, valuation of derivative instruments, valuation of software, valuation of intangible assets, valuation of goodwill, valuation of lease liabilities and related right of use assets, contingent liability for loan repurchases, and valuation of non-cash equity grants and issuances. Actual results and outcomes may differ from management's estimates and assumptions due to risks and uncertainties.

**CASH, CASH EQUIVALENTS, AND RESTRICTED CASH**

Beeline considers highly liquid investments purchased with a remaining maturity of 90 days or less at the time of purchase to be cash equivalents. Cash equivalents include money market accounts that are readily convertible into cash.

The Company maintains certain cash balances that are restricted under warehouse and/or master repurchase agreements, broker margin accounts associated with its derivative instruments and other restrictions. The restricted cash balance as of September 30, 2025 was $45,472.

**MORTGAGE LOANS HELD FOR SALE AND GAINS ON SALE OF LOANS REVENUE RECOGNITION**

Mortgage loans held for sale are carried at fair value under the fair value option in accordance with ASC 825, *Financial Instruments*, with changes in fair value recorded in gain on sale of loans, net on the consolidated statements of operations. The fair value of mortgage loans held for sale committed to investors is calculated based on the investor commitment.

Gains and losses from the sale of mortgage loans held for sale are recognized based upon the difference between the sales proceeds and carrying value of the related loans upon sale and are recorded in gain on sale of loans, net on the consolidated statements of operations. Sales proceeds reflect the cash received from investors through the sale of the loan and servicing release premium. Gain on sale of loans, net also includes the unrealized gains and losses associated with the changes in the fair value of mortgage loans held for sale, and the realized and unrealized gains and losses from derivative instruments.

Mortgage loans held for sale are considered sold when the Company surrenders control over the financial assets. Control is considered to have been surrendered when the transferred assets have been isolated from the Company, beyond the reach of the Company and its creditors; the purchaser obtains the right (free of conditions that constrain it from taking advantage of that right) to pledge or exchange the transferred assets; and the Company does not maintain effective control over the transferred assets through either an agreement that both entitles and obligates the Company to repurchase or redeem the transferred assets before their maturity or the ability to unilaterally cause the holder to return specific financial assets. The Company typically considers the above criteria to have been met upon acceptance and receipt of sales proceeds from the purchaser.

**Beeline Holdings, Inc.**

**Notes to Consolidated Financial Statements**

**September 30, 2025**

**(Unaudited)**

Mortgage loans sold to investors by the Company, and which met investor underwriting guidelines at the time of sale, may be subject to repurchase in the event of specific default by the borrower or subsequent discovery that underwriting standards were not met. The Company may, upon mutual agreement, indemnify the investor against future losses on such loans. Actual losses incurred are reflected as a reduction in gains on sale of loans, net in the consolidated statements of operations.

Since mortgage loans held for sale have maturity dates greater than one year from the balance sheet date but are expected to be sold in a short time frame (less than one year), they are recorded as current assets.

Changes in the balance of mortgage loans held for sale are included in cash flows from operating activities in the consolidated statements of cash flows in accordance with ASC 230-10-45-21, *Statement of Cash Flows*.

**REVENUE RECOGNITION**

*Gains on Sale of Loans, Net*

See discussion above under "Mortgage Loans Held for Sale and Gain on Sale of Loans Revenue Recognition" and below under "Derivative Financial Instruments and Revenue Recognition".

*Loan Origination Fees* 

Loan origination fees represent revenue earned from originating mortgage loans. Loan origination fees generally represent flat per-loan fee amounts based on a percentage of the original principal loan balance and are recognized as revenue at the time the mortgage loans are funded since the loans are held for sale.

*Interest Income*

Interest income on mortgage loans held for sale is recognized for the period from loan funding to sale based upon the principal balance outstanding and contractual interest rates. Revenue recognition is discontinued when loans become 90 days delinquent, or when, in management's opinion, the recovery of principal and interest becomes doubtful and the mortgage loans held for sale are put on nonaccrual status. For loans that have been modified, a period of six payments is required before the loan is returned to an accrual basis.

*Interest Expense*

Interest expense relating to the warehouse lines of credit is included in revenues. Other interest expense is included in other (income)/expense.

*Title Fees*

Settlement fees and commissions earned at loan settlement on insurance premiums paid to title insurance companies.

 

**Beeline Holdings, Inc.**

**Notes to Consolidated Financial Statements**

**September 30, 2025**

**(Unaudited)**

 

*Other Revenues*

Fees received from a marketing partner who is embedded in the Company's point-of-sale journey for investment property customers. The partner pays Beeline for leads they receive from a customer opting in to use their insurance company for landlord insurance during the application process.

**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. The Company issues IRLCs to originate mortgage loans and the fair value of the IRLCs, adjusted for the probability that a given IRLC will close and fund, is recognized in gain on sale of loans, net on the consolidated statements of operations. Subsequent changes in the fair value of the IRLC are measured at each reporting period within gain on loans, net until the loan is funded. The Company accounts for all derivative instruments as free-standing derivative instruments and does not designate any for hedge accounting.

**ACCOUNTS RECEIVABLE**

Accounts receivable consist primarily of amounts due from customers for services provided. Accounts receivable are stated at their gross outstanding balance, net of an allowance for credit losses. The allowance for credit losses is based on a combination of factors, including historical loss experience, aging of receivables, specific customer creditworthiness, current economic conditions, and reasonable and supportable forecasts. The Company writes off accounts receivable when they are deemed uncollectible, and any recoveries of previously written-off balances are recorded as a reduction to the provision for credit losses.

**BUSINESS COMBINATION**

The Company accounts for business combinations in accordance with ASC 805, *Business Combinations*. Under this guidance, the Company allocates the purchase price of an acquired business to the identifiable assets acquired and liabilities assumed at their estimated fair values as of the acquisition date. The excess of the purchase price over the estimated fair value of net assets acquired is recorded as goodwill.

Goodwill represents the excess purchase price over the fair value of the tangible net assets and intangible assets acquired in the business combination. The increases or decreases in the fair value of the Company's assets and liabilities can result from changes in fair values as of the acquisition date as determined during the one-year measurement period under ASC 805.

**GOODWILL**

Goodwill is the excess of the purchase price over the estimated fair value of identifiable net assets acquired in business combinations. The Company tests goodwill for impairment annually in the fourth quarter, or more frequently when indications of potential impairment exist. The Company monitors the existence of potential impairment indicators throughout the fiscal year. The Company may elect to perform either a qualitative test or a quantitative test to determine if it is more likely than not that the carrying value of a reporting unit exceeds its estimated fair value. Fair value reflects the price a market participant would be willing to pay in a potential sale of the reporting unit. If the estimated fair value of the Company exceeds its carrying value, then the Company concludes the goodwill is not impaired. If the carrying value of the Company exceeds its estimated fair value, the Company recognizes an impairment loss in an amount equal to the excess, not to exceed the amount of goodwill. Based on the Company's impairment analysis, management determined that goodwill was not impaired for the nine months ended September 30, 2025.

**Beeline Holdings, Inc.**

**Notes to Consolidated Financial Statements**

**September 30, 2025**

**(Unaudited)**

**INTANGIBLE ASSETS**

The Company accounts for certain finite-lived intangible assets at amortized cost and other certain indefinite-lived intangible assets at cost. Management reviews all intangible assets for probable impairment whenever events or circumstances indicate that the carrying amount of such assets may not be recoverable. If there is an indication of impairment, management would prepare an estimate of future cash flows (undiscounted and without interest charges) expected to result from the use of the asset and its eventual disposition. If these estimated cash flows were less than the carrying amount of the asset, an impairment loss would be recognized to write down the asset to its estimated fair value.

**PROPERTY AND EQUIPMENT, NET**

Property and equipment, including leasehold improvements and internal-use software, are recorded at cost, and are depreciated or amortized using the straight-line method over the estimated useful lives of the related assets, which range from three to five years. Repair and maintenance costs are expensed as incurred. Leasehold improvements are amortized over the shorter of the lease term or the improvement's estimated useful life. Depreciation is not recorded on projects-in-process until the project is complete and the associated assets are placed into service or are ready for the intended use. Impairment of property and equipment than the internal-use software is evaluated under ASC 360, *Property, Plant, and Equipment.*

Under ASC 350-40, *Internal-Use Software*, the Company capitalizes certain qualifying costs incurred during the application development stage in connection with the development of internal-use software. Costs related to preliminary project activities are expensed as incurred and post-implementation activities will be expensed as incurred. Capitalized software costs are amortized over the useful life of the software, which is five years. Impairment of internal-use software is evaluated under ASC 350-40-35, *Subsequent Measurement,* on a qualitative basis and if indicators exist, then a quantitative analysis is performed under ASC 360.

**FAIR VALUE MEASUREMENTS**

Fair value is the price that would be received if an asset were sold or the price that would be paid to transfer a liability in an orderly transaction between willing market participants at the measurement date. Required disclosures include classification of fair value measurements within a three-level hierarchy (Level 1, Level 2, and Level 3). Classification of a fair value measurement within the hierarchy is dependent on the classification and significance of the inputs used to determine the fair value measurement. Observable inputs are those that are observed, implied from, or corroborated with externally available market information. Unobservable inputs represent the estimates of market participants' assumptions.

Fair value measurements are classified in the following manner:

Level 1—Valuation is based on quoted prices in active markets for identical assets or liabilities at the measurement date.

Level 2—Valuation is based on either observable prices for identical assets or liabilities in inactive markets, observable prices for similar assets or liabilities, or other inputs that are derived directly from, or through correlation to, observable market data at the measurement date.

Level 3—Valuation is based on the internal models using assumptions at the measurement date that a market participant would use.

In determining fair value measurement, Beeline uses observable inputs whenever possible. The level of a fair value measurement within the hierarchy is dependent on the lowest level of input that has a significant impact on the measurement as a whole. If quoted market prices are available at the measurement date or are available for similar instruments, such prices are used in the measurements. If observable market data is not available at the measurement date, judgment is required to measure fair value.

The following is a description of measurement techniques for items recorded at fair value on a recurring basis. There was no material items recorded at fair value on a nonrecurring basis as of September 30, 2025 and December 31, 2024.

 

**Beeline Holdings, Inc.**

**Notes to Consolidated Financial Statements**

**September 30, 2025**

**(Unaudited)**

 

*Mortgage loans held for sale*: Loans held for sale that are valued using Level 2 measurements derived from observable market data, including market prices of securities backed by similar mortgage loans adjusted for certain factors to approximate the fair value of a whole mortgage loan, including the value attributable to mortgage servicing and credit risk. Loans held for sale for which there is little to no observable trading activity of similar instruments are valued using Level 3 measurements based upon dealer price quotes and internal models.

*IRLCs*: The fair value of IRLCs is based on current market prices of securities backed by similar mortgage loans (as determined above under mortgage loans held for sale), net of costs to close the loans, subject to the estimated loan funding probability, or "pull-through factor." Given the significant and unobservable nature of the pull-through factor, IRLCs are classified as Level 3.

*Forward commitments*: Beeline's forward commitments are valued based on quoted prices for similar assets in an active market with inputs that are observable and are classified within Level 2 of the valuation hierarchy. There were no open forward contracts as of September 30, 2025.

**DEBT DISCOUNT**

Beeline's debt instruments are recorded net of issuance costs (debt discount). The resulting debt discount is amortized over the term of the term loan using the straight-line method, which approximates the effective interest method, and the amortization of debt discount is included in interest expense in the consolidated statements of operations and comprehensive loss.

**FOREIGN CURRENCY TRANSLATION AND TRANSACTIONS**

The reporting currency of the company is the U.S. dollar. Except for Beeline Loans Pty Ltd, the functional currency of the Company is the U.S. dollar. The functional currency of Beeline Loans Pty Ltd is the Australian dollar. For Beeline Loans Pty Ltd, results of operations and cash flows are translated at average exchange rates during the period, assets and liabilities are translated at the exchange rate at the end of the period, and equity is translated at historical exchange rates. As a result, amounts related to assets and liabilities reported on the statements of cash flows may not necessarily agree with the changes in the corresponding balances on the balance sheets. Translation adjustments resulting from the process of translating the local currency financial statements into U.S. dollars are included in determining comprehensive loss. The translation adjustment for the nine months ended September 30, 2025 was $12,626.

Transactions denominated in foreign currencies are translated into the functional currency at the exchange rates prevailing on the transaction dates with any transaction gains and losses that arise from exchange rate fluctuations on transactions denominated in a currency other than the functional currency included in the results of operations as incurred. These transactions were de minimis for the nine months ended September 30, 2025.

As of September 30, 2025, the exchange rate used to translate balance sheet amounts from Australian dollars into U.S. dollars was $0.66, and the average exchange rate used to translate operation amounts from Australian dollars into U.S. dollars was $0.64.

**DEFERRED OFFERING COSTS**

The Company complies with the requirements of ASC 340, *Other Assets and Deferred Costs*, with regards to offering costs. Prior to the completion of an offering, offering costs are capitalized as non-current other assets in the consolidated balance sheets and consist principally of professional, underwriting and other expenses incurred through the consolidated balance sheet date that are directly related to the Company's proposed public offering. The deferred offering costs are charged to additional paid-in capital or as a discount to debt, as applicable, upon the completion of an offering or to expense if the offering is not completed.

**Beeline Holdings, Inc.**

**Notes to Consolidated Financial Statements**

**September 30, 2025**

**(Unaudited)**

**NON-CONTROLLING INTERESTS**

Beeline follows ASC 810, *Consolidation*, governing the accounting for and reporting of non-controlling interests ("NCI") in partially owned consolidated subsidiaries and the loss of control of subsidiaries. Certain provisions of this standard indicate, among other things, that NCI be treated as a separate component of equity, not as a liability, that increases and decreases in the parent's ownership interest that leave control intact be treated as equity transactions rather than step acquisitions or dilution gains or losses, and that losses of a partially-owned subsidiary be allocated to non-controlling interests even when such allocation might result in a deficit balance. The net loss attributed to NCI was separately designated in the accompanying consolidated statements of operations and comprehensive loss. Losses attributable to NCI in a subsidiary may exceed NCI's interests in the subsidiary's equity. The excess attributable to NCI is attributed to those interests. NCI shall continue to be attributed their share of losses even if that attribution results in a deficit NCI balance. Net loss attributable to NCI for the nine months ended September 30, 2025 was $0.2 million.

**INVESTMENT IN EQUITY METHOD INVESTEE**

On February 7, 2024, MagicBlocks, Inc., a Delaware corporation, was incorporated by a third party. On July 31, 2024, the Company was issued 4.3 million shares of Magic Blocks representing ownership interest of 47.6%. The Company has determined that its investment in MagicBlocks is subject to the equity method of accounting in accordance with ASC 825-10, *Financial Instruments*. As of September 30, 2025, the Company had an equity method investment of $0.

The Company entered into Simple Agreements for Future Equity ("SAFEs") with MagicBlocks. These SAFEs provide the Company with the right to receive equity in MagicBlocks upon the occurrence of specified future events, such as a qualified financing, change in control, or liquidation, as defined in the Agreements. The Company's investment of $0.5 million has been recorded based on the cost method of accounting and included in other assets on the consolidated balance sheet as of September 30, 2025. The Company evaluates the investments for any indications of impairment in value on a quarterly basis and as such, none were identified to indicate impairment during the nine months ended September 30, 2025.

In March 2025, the Company entered into a Master Services Agreement with MagicBlocks, as amended on August 27, 2025, whereby MagicBlocks provides the Company certain services as outlined in the Statement of Work for a monthly service fee of $10,000.

**DEPOSITS**

Deposits are included in other assets and include security deposits for leased office spaces, which are refundable to the Company upon expiration of the lease agreements.

**MARKETING AND ADVERTISING COSTS**

Marketing and advertising costs are expensed as incurred. For the nine months ended September 30, 2025 and 2024, marketing and advertising expenses were $2.0 million and $0, respectively.

**STOCK-BASED COMPENSATION**

The Company recognizes as compensation expense all stock-based awards issued to employees. The compensation cost is measured based on the grant-date fair value of the related stock-based awards and is recognized over the service period of stock-based awards, which is generally the same as the vesting period. The fair value of stock options is determined using the Black-Scholes valuation model, which estimates the fair value of each award on the date of grant based on a variety of assumptions including expected stock price volatility, expected terms of the awards, risk-free interest rate, and dividend rates, if applicable. Stock-based awards issued to non-employees are recorded at fair value on the measurement date and recognized over the service periods.

**INCOME TAXES**

The Company accounts for income taxes in accordance with ASC 740, *Income Taxes*, which requires the recognition of deferred income taxes for differences between the basis of assets and liabilities for financial statement and income tax purposes. The deferred tax assets and liabilities represent the future tax return consequences of those differences, which will either be taxable or deductible when the assets and liabilities are recovered or settled. Valuation allowances are established when necessary to reduce deferred tax assets to the amount expected to be realized.

**Beeline Holdings, Inc.**

**Notes to Consolidated Financial Statements**

**September 30, 2025**

**(Unaudited)**

The Company evaluates all significant tax positions as required by ASC 740. As of September 30, 2025, the Company does not believe that it has taken any positions that would require the recording of any additional tax liability, nor does it believe that there are any unrealized tax benefits that would either increase or decrease within the next year.

Any penalties and interest assessed by income taxing authorities are included in operating expenses.

The federal and state income tax returns of the Company are subject to examination by the IRS and state taxing authorities, generally for three years after they were filed. Tax years 2022, 2023, and 2024 remain open for potential audit.

**TROUBLED DEBT RESTRUCTURING**

The Company evaluates all modifications to its debt agreements in accordance with ASC 470-60*, Debt – Troubled Debt Restructurings by Debtors*. A debt restructuring is considered a troubled debt restructuring ("TDR") if the creditor, for economic or legal reasons related to the debtor's financial difficulties, grants a concession to the debtor that it would not otherwise consider.

Concessions may include, but are not limited to:

● A reduction in the stated interest rate,

● An extension of the maturity date,

● A reduction in the principal amount or accrued interest, or

● A combination of the above.

When a debt restructuring qualifies as a TDR, the Company evaluates whether the restructuring represents a modification or an extinguishment of debt. If the future undiscounted cash flows of the restructured debt are less than the carrying amount of the original debt, a gain is recognized in the period of the restructuring. The restructured debt is subsequently measured based on the revised terms.

**COMPREHENSIVE INCOME (LOSS)**

Comprehensive income (loss) includes all changes in equity during a period from non-owner sources and is presented in accordance with the provisions of ASC 220, *Comprehensive Income*. The Company reports comprehensive income in the consolidated statements of operations and comprehensive income (loss), which includes net income (loss) and other comprehensive income (loss). Other comprehensive income (loss) includes foreign currency translation adjustments, including gains and losses from the translation of the Company's foreign subsidiary whose functional currency is not the U.S. dollar.

**OPERATING SEGMENTS**

Operating segments are identified as components of an enterprise for which separate discrete financial information is available for evaluation by the Company's chief operating decision maker ("CODM") and relied upon when making decisions regarding resource allocation and assessing performance. When evaluating the Company's financial performance, the CODM reviews total revenues, total expenses, and expenses by functional classification, using this information to make decisions on a company-wide basis.

The Company operates in three reportable segments. The CODM for the Company is the Chief Executive Officer (the "CEO"). The Company's CEO reviews operating results on an aggregate basis and manages the Company's operations as a whole for the purpose of evaluating financial performance and allocating resources. Accordingly, the Company has determined that it has a three-reportable and operating segment structure. The CEO uses aggregate net loss to allocate resources in the annual budgeting and forecasting process and also uses that measure as a basis for evaluating financial performance regularly by comparing actual results with established budgets and forecasts. The measure of segment assets is reported on the consolidated balance sheets as total assets.

**Beeline Holdings, Inc.**

**Notes to Consolidated Financial Statements**

**September 30, 2025**

**(Unaudited)**

**RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS** 

In November 2024, the FASB issued ASU 2024-03, *Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures (Subtopic 220-40)*, which requires entities to provide more detailed disaggregation of expenses in the income statement, focusing on the nature of the expenses rather than their function. The new disclosures will require entities to separately present expenses for significant line items, including but not limited to, depreciation, amortization, and employee compensation. Entities will also be required to provide a qualitative description of the amounts remaining in relevant expense captions that are not separately disaggregated quantitatively, disclose the total amount of selling expenses and, in annual reporting periods, provide a definition of what constitutes selling expenses. This pronouncement is effective for fiscal years beginning after December 15, 2026, and interim periods within fiscal years beginning after December 15, 2027, with early adoption permitted. The Company does not expect the adoption of this new guidance to have a material impact on the financial statements.

**RECLASSIFICATION OF PRIOR YEAR PRESENTATION**

Certain prior year amounts have been reclassified for consistency with the current year presentation. These reclassifications had no effect on the reported results of operations or cash flows. The assets and liabilities of Bridgetown Spirits and the spirits segment have been classified as held for sale as of December 31, 2024. The operating results of Bridgetown Spirits and the spirits segment have been classified as discontinued operations during the three and nine months ended September 30, 2025 and 2024, respectively, *See Note 4 – Discontinued Operations*. As a result of the merger, the statement of operations for the nine months ended September 30, 2024 represents the new structure and retrospectively reclassifies discontinued operations. In addition, the senior secured debentures were reclassed from notes payable to secured credit facilities and stock to be issued related to common stock and Series G preferred stock was presented separately as of December 31, 2024.

**4. DISCONTINUED OPERATIONS**

The Company reports discontinued operations by applying the following criteria in accordance with ASC 205-20, *Presentation of Financial Statements – Discontinued Operations*: (1) Component of an entity; (2) Held for sale criteria; and (3) Strategic shift.

*Craft C+P*

The operating results of Craft C+P have been classified as discontinued operations during the nine months ended September 30, 2024. The consolidated financial statements for the prior periods have been adjusted to reflect comparable information.

Income and expense related to Craft C+P were as follows for the nine months ended September 30, 2024:

---

| | |
|:---|:---|
| (Dollars in thousands) | **2024** |
| Sales | $6775 |
| Less customer programs and excise taxes | 117 |
| &nbsp;&nbsp;&nbsp;Net sales | 6658 |
| Cost of sales | 6322 |
| &nbsp;&nbsp;&nbsp;Gross profit | 336 |
| Operating expenses: |  |
| &nbsp;&nbsp;&nbsp;Sales and marketing expenses | 45 |
| &nbsp;&nbsp;&nbsp;General and administrative expenses | 2355 |
| &nbsp;&nbsp;&nbsp;Gain on disposal of property and equipment | (195) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total operating expenses | 2205 |
| **Loss from operations** | (1869) |
| &nbsp;&nbsp;&nbsp;Other income | 3 |
| **Net loss** | $(1866) |

---

 

**Beeline Holdings, Inc.**

**Notes to Consolidated Financial Statements**

**September 30, 2025**

**(Unaudited)**

 

*Bridgetown Spirits*

On July 25, 2025, the Company entered into a Debt Satisfaction Agreement (the "DSA") with Bridgetown Spirits and three individuals (the "Buyers") including Geoffrey Gwin, the President of Bridgetown Spirits, pursuant to which the Company transferred to the Buyers all 530,000 shares of its Bridgetown Spirits common stock held by the Company in exchange for the satisfaction of outstanding amounts payable by the Company to the Buyers totaling $0.4 million As a result of the foregoing, Bridgetown Spirits is no longer a subsidiary of the Company. The Company recorded $0.7 million to loss on extinguishment of debt in the consolidated statements of operations and comprehensive loss for the three and nine months ended September 30, 2025.

In connection with the DSA, Bridgetown Spirits issued a Senior Secured Original Issue Discount Promissory Note and Security Agreement (the "Note") in the principal amount of $0.1 million payable to the Company with an original issue discount of $25,000. The Note is receivable as follows: (i) $50,000 is receivable on April 24, 2026, and the remaining $50,000 is receivable on July 25, 2026. The Note is secured by the assets of Bridgetown Spirits. The Note is included in prepaid expenses and other current assets on the consolidated balance sheet as of September 30, 2025.

The assets and liabilities of Bridgetown Spirits have been classified as held for sale as of December 31, 2024. The operating results of Bridgetown Spirits and the spirits segment have been classified as discontinued operations during the three and nine months ended September 30, 2025 and 2024, respectively. The consolidated financial statements for the prior periods have been adjusted to reflect comparable information.

Assets and liabilities related to Bridgetown Spirits were as follows as of December 31, 2024:

---

| | |
|:---|:---|
| (Dollars in thousands) | **2024** |
| **Assets** |  |
| Current assets: |  |
| &nbsp;&nbsp;&nbsp;Cash and cash equivalents | $310 |
| &nbsp;&nbsp;&nbsp;Inventories | 1493 |
| &nbsp;&nbsp;&nbsp;Prepaid expenses and other current assets | 75 |
| &nbsp;&nbsp;&nbsp;Accounts receivables, net | 134 |
| &nbsp;&nbsp;&nbsp;Current assets of discontinued operations held for sale | 2012 |
| Intangible assets, net | 822 |
| Right-of-use assets | 372 |
| Property and equipment, net | 95 |
| Other assets, net | 180 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total Assets | $3481 |
| **Liabilities** |  |
| Current liabilities: |  |
| &nbsp;&nbsp;&nbsp;Accounts payable | $136 |
| &nbsp;&nbsp;&nbsp;Accrued liabilities | 170 |
| &nbsp;&nbsp;&nbsp;Current portion of lease liabilities | 186 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total current liabilities | 492 |
| Lease liabilities, net of current portion | 163 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total liabilities | $655 |

---

Income and expense related to Bridgetown Spirits and the spirits segment were as follows for the nine months ended September 30, 2025 and 2024:

---

| | | |
|:---|:---|:---|
| (Dollars in thousands) | **2025** | **2024** |
| Net sales, spirits | $1143 | $1977 |
| Cost of sales, spirits (inclusive of depreciation) | 956 | 1476 |
| Salaries and benefits | 348 | 444 |
| Marketing and advertising | 286 | 254 |
| &nbsp;&nbsp;&nbsp;Total operating expenses | 1590 | 2174 |
| Loss from operations | (447) | (197) |
| &nbsp;&nbsp;&nbsp;Other income | 995 | 35 |
| &nbsp;&nbsp;&nbsp;Net income (loss) from discontinued operations | 548 | (162) |
| &nbsp;&nbsp;&nbsp;Loss from disposal of discontinued operations | (1293) | - |
| Net loss | $(745) | $(162) |

---

There was a 47% non-controlling interest in Bridgetown Spirits prior to the disposal date. All of the net loss attributable to non-controlling interests in the consolidated statements of operations is related to Bridgetown Spirits.

**Beeline Holdings, Inc.**

**Notes to Consolidated Financial Statements**

**September 30, 2025**

**(Unaudited)**

**5. BUSINESS SEGMENTS**

The Company's CODM, the Chief Executive Officer, evaluates how the Company views and measures its performance. ASC 280, *Segment Reporting* establishes the standards for reporting information about segments in financial statements. After consideration of these criteria, the CODM has determined that there are three reportable segments, consisting of Beeline Loans, Beeline Title Holdings and Corporate.

Beeline Loans is an AI-driven fintech mortgage lender that develops proprietary software in the form of major enhancements and new developments in its lending platform, including Beeline's Chat API "Bob."

Beeline Title Holdings provides title and loan closing services for Beeline's mortgage origination business. It is providing similar services with respect to the Company's BeelineEQUITY product.

Corporate primarily consists of general corporate expenses, including public company costs, executive compensation, legal and regulatory compliance, and other administrative functions that support the overall business. This segment also includes holding company expenses, such as financing costs, accounting, legal, insurance, investor relations, and strategic corporate initiatives that are not directly attributable to any operating segment.

The Company measures segment performance to allocate resources primarily based on revenues of Beeline Loans and Beeline Title Holdings and the general and administrative costs related to corporate. Total asset information by segment is not provided to, or reviewed by, the CODM as it is not used to make strategic decisions, allocate resources or assess performance. The accounting policies of the segments are the same as those described for the Company *in Note 3 - Summary of Significant Accounting Policies*.

Segment information was as follows for the nine months ended September 30:

---

| | | |
|:---|:---|:---|
| (Dollars in thousands) | **2025** | **2024** |
| **Beeline Loans** |  |  |
| Gain on sale of loans, net | $3598 | $- |
| Loan origination fees | 638 |  |
| Interest income (expense) |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Interest income | 232 |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Interest expense | (241) | - |
| &nbsp;&nbsp;&nbsp;Interest income (expense), net | (9) |  |
| Other revenues | 12 | - |
| &nbsp;&nbsp;&nbsp;Total net revenues | 4239 | - |
| Compensation, commissions and benefits | 2737 |  |
| General and administrative expenses | 471 |  |
| Depreciation and amortization | 2412 |  |
| Marketing and advertising | 1889 |  |
| Other operating expenses | 1536 | - |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total operating expenses | 9045 | - |
| Loss from operations | (4806) |  |
| &nbsp;&nbsp;&nbsp;Interest expense | (37) |  |
| &nbsp;&nbsp;&nbsp;Gain on extinguishment of debt | 34 | - |
| **Net loss** | $**(4809)** | $**-** |

---

---

| | | |
|:---|:---|:---|
| **Beeline Title Holdings** |  |  |
| Title fees | $1172 | $- |
| &nbsp;&nbsp;&nbsp;Total net revenues | 1172 | - |
| Compensation and benefits | 988 |  |
| General and administrative expenses | 119 |  |
| Marketing and advertising | 98 |  |
| Other operating expenses | 287 | - |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total operating expenses | 1492 | - |
| **Net loss** | $**(320)** | $**-** |

---

---

| | | |
|:---|:---|:---|
| **Corporate** |  |  |
| Compensation and benefits | $2598 | $509 |
| General and administrative expenses | 3529 | 640 |
| Depreciation and amortization | 75 |  |
| Marketing and advertising | 12 |  |
| Other operating expenses | 140 | - |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total operating expenses | 6354 | 1149 |
| &nbsp;&nbsp;&nbsp;Interest income | 5 |  |
| &nbsp;&nbsp;&nbsp;Interest expense | (2309) | (965) |
| &nbsp;&nbsp;&nbsp;Loss on extinguishment of debt | (644) |  |
| &nbsp;&nbsp;&nbsp;Change in equity method investment | 129 |  |
| &nbsp;&nbsp;&nbsp;Other income | 175 | 2 |
| **Net loss** | $**(9155)** | $**(2112)** |
| **Consolidated net loss** | $**(14284)** | $**(2112)** |

---

**Beeline Holdings, Inc.**

**Notes to Consolidated Financial Statements**

**September 30, 2025**

**(Unaudited)**

**6. FAIR VALUE MEASUREMENTS**

Assets or liabilities measured at fair value on a recurring basis were as follows:

---

| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
| (Dollars in thousands) | **September 30, 2025** | **September 30, 2025** | **September 30, 2025** | **December 31, 2024** | **December 31, 2024** | **December 31, 2024** |
| Description | **Level 1** | **Level 2** | **Level 3** | **Level 1** | **Level 2** | **Level 3** |
| Mortgage loans held for sale | $- | $8923 | $- | $- | $6925 | $- |
| Interest rate lock commitment derivative |  |  | 240 |  |  | 18 |

---

A roll forward of the level 3 valuation financial instruments was as follows:

---

| | | |
|:---|:---|:---|
| (Dollars in thousands) | **September 30, 2025** | **December 31, 2024** |
| Balance, beginning of year | $18 | $124 |
| Change in fair value in gain on sale of loans, net | 222 | (106) |
| **Balance, end of period** | $**240** | $**18** |

---

**7. MORTGAGE LOANS HELD FOR SALE**

Beeline sells substantially all of its originated mortgage loans to investors and adjusts adjusted its loan balance to the estimated fair value based on the eventual sales of loans. Mortgage loans held for sale, at fair value, consisted of the following:

---

| | | |
|:---|:---|:---|
| (Dollars in thousands) | **September 30, 2025** | **December 31, 2024** |
| Mortgage loans held for sale | $8732 | $6878 |
| Net fair value adjustment | 191 | 47 |
| **Mortgage loans held for sale, at fair value** | $**8923** | $**6925** |

---

**Beeline Holdings, Inc.**

**Notes to Consolidated Financial Statements**

**September 30, 2025**

**(Unaudited)**

**8. INTANGIBLE ASSETS**

Intangible assets consisted of the following:

---

| | | |
|:---|:---|:---|
| (Dollars in thousands) | **September 30, 2025** | **December 31, 2024** |
| Beeline brand | $&nbsp;&nbsp;&nbsp;&nbsp; 4557 | $&nbsp;&nbsp;&nbsp;&nbsp; 4557 |
| Customer list | 393 | 393 |
| Total | 4950 | 4950 |
| Less accumulated amortization | (96) | (23) |
| **Intangible assets** | $**4854** | $**4927** |

---

The Beeline brand has been determined to have an indefinite life and is not amortized. The Company, on an annual basis, tests the indefinite-lived asset for impairment. If the carrying value of an indefinite-lived asset is found to be impaired, then the Company will record an impairment loss and reduce the carrying value of the asset. As of September 30, 2025, the Company determined that the Beeline asset was not impaired.

Customer data that was acquired in the merger has a useful life of four years and amortization expense was $0.1 million for the nine months ended September 30, 2025.

**9. PROPERTY AND EQUIPMENT**

Property and equipment consisted of the following:

---

| | | |
|:---|:---|:---|
| (Dollars in thousands) | **September 30, 2025** | **December 31, 2024** |
| Internal-use software | $15423 | $15225 |
| Furniture and fixtures | 51 | 28 |
| Leasehold improvements | 151 | 151 |
| Computers and hardware | 14 | 12 |
| Total | 15639 | 15416 |
| Less accumulated depreciation and amortization | (3169) | (736) |
| **Total property and equipment, net** | $**12470** | $**14680** |

---

Depreciation expense related to property and equipment was $0.1 million and $0 for the nine months ended September 30, 2025 and 2024, respectively. Amortization expense related to internal-use software was $2.3 million for the nine months ended September 30, 2025.

The estimated future amortization expense of internal-use software as of September 30, 2025 was as follows:

---

| | |
|:---|:---|
| (Dollars in thousands) |  |
| 2025-Remainder of year | $771 |
| 2026 | 3085 |
| 2027 | 3085 |
| 2028 | 3085 |
| 2029 | 2394 |
|  | $**12420** |

---

Beeline's internal developers created a new proprietary software and launched it in 2024. The most notable feature of the new software is the integration of Beeline's Chat API "Bob". The Company recorded $0.2 million of additional purchases of internal-use software for the nine months ended September 30, 2025.

**Beeline Holdings, Inc.**

**Notes to Consolidated Financial Statements**

**September 30, 2025**

**(Unaudited)**

**10. WAREHOUSE LINE OF CREDIT** 

On September 21, 2021, Beeline Loans entered into an agreement with a lender for a $10.0 million line of credit. The line automatically renews for successive one-year terms, unless terminated by Beeline Loans or the lender upon 60 days' notice. The line was renewed on September 30, 2023 with a reduction in available funding from $10.0 million to $5.0 million. The line has further subsequently been renewed with the latest renewal in October 2025, *see Note 20 – Subsequent Events*. The interest rate is the greater of interest on the underlying loan or 4.25% - 5.50%, depending on how many loans Beeline Loans closes per month. Beeline Loans is required to provide the lender with annual audited financial statements, quarterly unaudited financial statements, and monthly interim unaudited financial statements, if requested. Beeline Loans is also subject to loan repurchase provisions as defined in the agreement and certain non-financial covenants. Beeline Loans grants to the lender a security interest in and to all of Beeline Loans' right, title, and interest in and to each mortgage loan in which the lender has acquired a warehouse interest. As of September 30, 2025, the warehouse line of credit and accrued interest outstanding balance was $8.4 million. The lender allowed the draws to exceed the $5.0 million line of credit. Interest expense on the warehouse line of credit was $0.2 million for the nine months ended September 30, 2025.

In October 2025, the Company expanded its warehouse lines to $25.0 million tripling its prior $5.0 million line to $15.0 million and adding two new $5.0 million lines with new lenders, *see Note 20 – Subsequent Events*.

**11. NOTES PAYABLE**

Notes payable consisted of the following:

---

| | | |
|:---|:---|:---|
| (Dollars in thousands) | **September 30, 2025** | **December 31, 2024** |
| Note payable - 2023 | $&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; - | $&nbsp;&nbsp;&nbsp;&nbsp; 500 |
| Term loan agreement | - | 275 |
| &nbsp;&nbsp;&nbsp;Total |  | 775 |
| Accrued interest |  | 70 |
| Debt discount | - | (5) |
| &nbsp;&nbsp;&nbsp;**Notes payable, net** | $**-** | $**840** |

---

On May 13, 2025, the Company borrowed $0.3 million from an affiliate of one of the secured credit lenders and issued a $0.3 million non-convertible promissory note which was due on July 13, 2025, and bore interest computed at the per annum minimum Internal Revenue Service rate imputed as it may change from time-to-time prior to maturity. In June 2025, the note was repaid in full.

During 2023, Beeline Financial issued a note payable for proceeds of $0.5 million, net of offering costs. However, this balance is not included in the 2023 consolidated balance sheet due to the Merger closing October 7, 2024*.* Interest accrues at 18.0% per annum and interest-only payments are made monthly. This loan matured December 2024. On June 27, 2025, the lender agreed not to take action against the Company if the principal and any outstanding interest was paid by September 15, 2025. During September 2025, the principal balance and any accrued interest was fully repaid.

On April 29, 2021, Beeline Financial and Beeline Loans entered into a term loan agreement with the Business Development Company of Rhode Island ("BDCRI") for $0.3 million which was originally to mature on April 29, 2026 with an interest rate of 6.0%. The loan was amended in June 2024 to accelerate the maturity to June 21, 2024, and to change the personal guarantees from two guarantors to solely Beeline Financial's Chief Executive Officer, as the guarantor. Beeline Financial made interest-only payments during 2024. On June 26, 2025, BDCRI agreed not to take action against the Company if the principal and any outstanding interest is paid by October 1, 2025. During September 2025, the principal balance and accrued interest was fully repaid.

**Beeline Holdings, Inc.**

**Notes to Consolidated Financial Statements**

**September 30, 2025**

**(Unaudited)**

**12. NOTES PAYABLE – RELATED PARTIES**

Notes payable, related parties consisted of the following:

---

| | | |
|:---|:---|:---|
| (Dollars in thousands) | **September 30, 2025** | **December 31, 2024** |
| Chief Executive Officer | $&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; - | $&nbsp;&nbsp;&nbsp;&nbsp; 737 |
| Board member | - | 87 |
| &nbsp;&nbsp;&nbsp;Total |  | 824 |
| Accrued interest | - | 67 |
| &nbsp;&nbsp;&nbsp;**Total notes payable, related parties** | $**-** | $**891** |

---

In February and March of 2025, Mr. Liuzza advanced the Company a total of $122,241 which the Company used for working capital and general corporate purposes. In exchange for these advances, on April 25, 2025, the Board of Directors approved the advances as loans, and the Company issued Mr. Liuzza a promissory note which bears interest at a rate of 8% per annum and is payable on demand. On May 29, 2025, the note was amended to $0.4 million. On December 31, 2024, Nicholas Liuzza, the Company's Chief Executive Officer, loaned $0.7 million to Beeline Loans in exchange for a demand promissory note, which accrues interest at the rate of 8% per annum and is payable within 15 days of a demand notice made by Mr. Liuzza. The funds were held in a restricted account to permit Beeline Loans to improve its ability to make real estate loans. On February 17, 2025, he converted the $0.7 million bridge loan into $0.7 million of units comprised of 1,372,549 shares of Series G Preferred Stock and five-year Warrants to purchase a total of 68,628 shares. During September 2025, the principal balance and accrued interest was fully repaid.

In July 2023, Beeline Financial issued a note to a private company in which Joseph Freedman, a Board member of the Company and Beeline Financial, has an ownership interest. This note was for $0.1 million and accrued interest at 7% per annum and is due on demand. This note was subsequently repaid in January 2025.

**13. SECURED CREDIT FACILITIES**

Secured credit facilities consisted of the following:

---

| | | |
|:---|:---|:---|
| (Dollars in thousands) | **September 30, 2025** | **December 31, 2024** |
| Purchase agreement | $&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; - | $1938 |
| Side letter |  | 448 |
| Senior secured debentures | - | 3600 |
| &nbsp;&nbsp;&nbsp;Total |  | 5986 |
| Accrued interest |  | 199 |
| Debt issuance costs | - | (1719) |
| &nbsp;&nbsp;&nbsp;**Total secured credit facilities, net** | $**-** | $**4466** |

---

*Purchase Agreement*

On November 14, 2024, the Company sold $1.9 million in aggregate principal amount of Senior Secured Notes (the "Notes") and Pre-Funded Warrants to purchase a total of 36,360 shares of common stock for total net proceeds of $1.6 million in a private placement offering (the "Offering"). As of September 30, 2025, debt issuance costs were fully amortized.

In March 2025, the Company and certain of the holders agreed to an extension of the maturity date to April 14, 2025 in exchange for an increase to the principal of the notes by 10%, and two lenders were each paid their principal balance plus 2.5% interest of $0.3 million. On April 14, 2025, the Company and the remaining Note holders entered into an agreement for a second extension to May 14, 2025 for an additional payment in an amount equal to 5% of the outstanding principal of the applicable Notes.

**Beeline Holdings, Inc.**

**Notes to Consolidated Financial Statements**

**September 30, 2025**

**(Unaudited)**

On May 12, 2025, the Company entered into an agreement with two Note holders to extend the maturity date to August 14, 2025. On June 26, 2025, the Company amended $0.5 million of the Notes by making them convertible into shares of the Company's common stock at a conversion price of $1.32 per share. These Notes were subsequently converted to common stock at the fair of common stock and therefore no gain or loss on the conversion, see *Note 15 – Stockholders' Equity.* Additionally, these same lenders extinguished an extension fee of $0.1 million.

On May 14, 2025, the Company entered into an agreement with the two other Note holders to extend the maturity date of each Note to May 26, 2025 after the Company paid 50% of the outstanding principal balance of $0.5 million. In June 2025, the Company repaid the remaining the balance of $0.5 million.

The Company also entered in three forms of side letters with the investors which (i) permitted one investor which along with an affiliate invested $0.4 million to exchange that amount of stated value of shares of Series F Preferred Stock (the "Series F") for a $0.4 million 120-day promissory note to another affiliate, which note was issued immediately prior to the closing of the Offering and has substantially identical terms to the Notes issued therein, except it is subordinated with respect to its security interest, (ii) permitted two investors to convert Series D Preferred Stock beginning on April 7, 2025, see *Note 15 – Stockholders' Equity*, and (iii) permitted two investors to receive a number of shares of Series F equal to 50% of their investment amount, or $0.1 million each, using the stated value of the Series F, which is $0.50 per share, to determine the number of shares of Series F. As of September 30, 2025, debt issuance costs related to the side letters were fully amortized.

On June 26, 2025, the Company amended the 120-day promissory note $0.4 million by making it convertible into shares of the Company's common stock at a conversion price of $1.32 per share. This note was subsequently converted to common stock, see *Note 15 – Stockholders' Equity.*

*Senior secured debentures*

During 2024, Beeline Financial issued senior secured debentures of $3.6 million maturing September 5, 2025 with payments made in nine equal monthly installments of $0.4 million beginning January 2025. During September 2025, the principal balance and accrued interest was fully repaid. As of September 30, 2025, the debt discount was fully amortized.

**14. LEASE OBLIGATIONS**

Beeline Financial leases office space under various operating lease agreements, including an office for its headquarters, for branch location and licensing purposes under non-cancelable lease arrangements that provide for payments on a graduated basis with various expiration dates. Terms of these leases include, in some instances, scheduled rent increases, renewals, purchase options and maintenance costs, and vary by lease. Beeline Financial has leased approximately 9,809 square feet of space in Rhode Island and Australia that expires at various dates through 2030. The Company does not have any financing leases.

As the rate implicit in each lease is not readily determinable, the Company uses its incremental borrowing rate of 10% based on information available at commencement to determine the present value of the lease payments. Right-of-use assets and lease liabilities are recognized at commencement date based on the present value of lease payments over the lease term. Leases with an initial term of 12 months or less ("short-term leases") are not recorded on the balance sheet and are recognized on a straight-line basis over the lease term. As of September 30, 2025, the amount of right-of-use assets and lease liabilities were $0.9 million and $1.1 million, respectively. Lease expense for operating leases is recognized on a straight-line basis over the lease term. Aggregate lease expense for the nine months ended September 30, 2025 was $0.2 million.

**Beeline Holdings, Inc.**

**Notes to Consolidated Financial Statements**

**September 30, 2025**

**(Unaudited)**

Maturities of lease liabilities as of September 30, 2025 were as follows:

---

| | | |
|:---|:---|:---|
| (Dollars in thousands) | **Operating Leases** | **Weighted-Average Remaining Term in Years** |
| 2025-Remainder of year | $71 |  |
| 2026 | 294 |  |
| 2027 | 301 |  |
| 2028 | 272 |  |
| 2029 | 242 |  |
| Thereafter | 249 |  |
| Total lease payments | 1429 |  |
| Less imputed interest (based on 10.0% weighted-average discount rate) | (308) |  |
| Present value of lease liability | 1121 | 3.68 |
| Less current portion | 178 |  |
| Lease liabilities, net of current portion | $943 |  |

---

**15. STOCKHOLDERS' EQUITY**

*Issuance of Common Stock*

 

*2025*

 

On March 12, 2025, the Company implemented a 1-for-10 reverse stock split of its common stock. All share and per share data in these consolidated financial statements have been retrospectively adjusted to give effect to the stock split.

From June 26, 2025 through June 30, 2025, certain holders of the Notes converted $1.0 million of their Notes into 747,221 shares of common stock.

In June 2025, the Company issued 10,000 shares of common stock in satisfaction of the former Chief Executive Officer's employment agreement which was recorded as stock issuable of $14,300 as of March 31, 2025.

In February 2025, the Company issued 13,115 shares of common stock related to a legal settlement agreed upon in October 2024 where $0.1 million was recorded as stock to be issued as of December 31, 2024.

During 2025, the Company sold 5,540,043 shares of common stock for gross proceeds of $7.0 million in at-the-market public placements. The Company recorded related offering costs of $0.3 million as of September 30, 2025.

During 2025, the Company issued a cumulative 7,273,382 shares of common stock as a result of various preferred stock conversions as noted below.

*2024*

On September 5, 2024, the Company entered into a Securities Purchase Agreement with a single institutional investor for the sale of 9,282 shares of common stock for $10.00 per share, and the sale of pre-funded warrants for $9.999 per warrant. The warrants permitted the purchase of 34,920 shares of common stock for $0.001 per share. The warrants were exercised on September 6, 2024.

During the nine months ended September 30, 2024, the Company issued 176 shares of common stock to a director for stock-based compensation of $2,046 at $11.60 per share. During the nine months ended September 30, 2024, the Company issued 5,574 shares of common stock to employees and a consultant for stock-based compensation of $0.1 million at $12.10 per share.

During the nine months ended September 30, 2024, the Company issued dividends of 17,773 shares of common stock at $8.44 per share to its Series B Preferred stockholders.

During 2024, the Company issued a cumulative 75,740 shares of common stock as a result of conversion of Series C Preferred shares.

 

**Beeline Holdings, Inc.**

**Notes to Consolidated Financial Statements**

**September 30, 2025**

**(Unaudited)**

 

*ELOC Agreement*

On December 31, 2024, the Company entered into entered into a Common Stock Purchase Agreement and related Registration Rights Agreement (collectively, the "ELOC Agreement") with an institutional investor (the "Purchaser") pursuant to which the Company agreed to sell, and the Purchaser agreed to purchase, up to $35 million of the Company's common stock, subject to a sale limit of 19.99% of the outstanding shares of the Company's common stock

On March 7, 2025, the Company entered into an Amended ELOC Agreement to reduce the maximum amount under the ELOC Agreement from $35 million to $10 million. On September 8, 2025, the Company again amended the ELOC Agreement to increase the commitment amount by $10 million, to maximum total sales of up to $20 million, and to remove minimum closing price conditions for effecting purchases under the ELOC Agreement. As a result, the Company may sell up to $12.5 million under the ELOC Agreement (after giving effect to prior sales) beginning after January 11, 2026, *see Note 20 – Subsequent Events*. During the nine months ended September 30, 2025, the Company sold and issued a total of 5,694,523 shares of common stock for an aggregate purchase price of $7.5 million to the Purchaser. The Company recorded offering costs related to the ELOC Agreement of $0.5 million as of September 30, 2025.

*Preferred Stock*

The Company has 100 million shares of preferred stock authorized.

*Issuance of Series A Preferred Stock*

On July 23, 2025, the Company entered into an agreement with a holder of and effected the exchange of 8,356,151 shares of Series F Preferred Stock and 68,951 shares of Series F-1 Preferred Stock of the Company in exchange for the issuance to the holder of 8,425,102 shares of a newly designated Series A Convertible Redeemable Preferred Stock (the "Series A Preferred Stock").

On July 23, 2025, the Company filed a Certificate of Designation, Preferences and Rights of the Series A Convertible Redeemable Preferred Stock of the Company (the "Certificate of Designations") with the Nevada Secretary of State designating and authorizing the issuance of up to 8,425,102 shares of Series A Preferred Stock. Each share of Series A Preferred Stock has a stated value of $0.50. Beginning on the initial issuance date of the Series A Preferred Stock, the holder may convert up to $1.0 million in stated value of Series A Preferred Stock (the "Special Conversion Amount") at a conversion price of $1.75 per share, subject to adjustment as provided therein and subject to beneficial ownership limitations. The conversion price is subject to customary adjustments including for reverse stock splits, forward stock splits, and similar corporate events, and is also subject to price protection adjustment in connection with subsequent sales or issuances of securities at a per-share price that is lower than the conversion price, subject to certain exceptions and limitations.

Beginning on the issuance date of the Series A Preferred Stock on July 23, 2025 and for a period of one-year thereafter, the Company has the right to redeem the shares of Series A Preferred Stock, other than the Special Conversion Amount, at a redemption price of $2.00 per underlying share of common stock (based on the $1.75 per share conversion price, subject to adjustment). At the end of the one-year redemption period, all remaining shares of Series A Preferred Stock (in addition to the Special Conversion Amount) will become convertible at the option of the holder.

Each share of Series A Preferred Stock is convertible into common stock by a conversion ratio equal to the stated value of the Series A Preferred Stock share divided by the Series A Preferred Stock conversion price. The Series A Preferred Stock is entitled to vote with the Company's common stock on an as-converted basis, subject to the 4.99% beneficial ownership limitation.

During the nine months ended September 30, 2025, 2,000,000 shares of Series A Preferred Stock were converted into 571,428 shares of common stock.

 

**Beeline Holdings, Inc.**

**Notes to Consolidated Financial Statements**

**September 30, 2025**

**(Unaudited)**

 

*Issuance of Series B Preferred Stock*

On October 19, 2021, the Company entered into a securities purchase agreement ("Purchase Agreement") with an accredited investor for its purchase of 2.5 million shares ("Preferred Shares") of Series B Convertible Preferred Stock ("Series B Preferred Stock") at a purchase price of $1.00 per Preferred Share, which Preferred Shares are convertible into shares of the Company's common stock pursuant to the terms and conditions set forth in a Certificate of Designation Establishing Series B Preferred Stock of the Company with an initial conversion price of $620.00 per share. 4,250 shares of common stock were reserved for issuance in the event of conversion of the Preferred Shares. The holder of Series B has voting rights on an as-converted basis.

The Series B Preferred Stock accrues dividends at a rate of 6% per annum, payable annually on the last day of December of each year. Dividends shall accrue from day to day, whether or not declared, and shall be cumulative. Dividends are payable at the Company's option either in cash or "in kind" in shares of common stock; provided, however that dividends may only be paid in cash following the fiscal year in which the Company has net income (as shown in its audited financial statements contained in its Annual Report on Form 10-K for such year) of at least $0.5 million. For "in-kind" dividends, holders will receive that number of shares of common stock equal to (i) the amount of the dividend payment due such stockholder divided by (ii) the volume weighted average price of the common stock for the 90 trading days immediately preceding a dividend date ("VWAP"). For both the nine months ended September 30, 2025 and 2024, the Company accrued $0.1 million of preferred dividends. During the nine months ended September 30, 2024, the Company issued dividends of 17,773 shares of common stock at $8.44 per share to its Series B Preferred stockholders.

*Issuance of Series C Preferred Stock*

In January 2025, the Certificate of Designation was withdrawn for the Series C Preferred Stock.

*Issuance of Series D Preferred Stock*

Each share of Series D Preferred Stock has a stated value of $10.00 and is convertible into shares of the Company's common stock pursuant to the terms and conditions set forth in a Certificate of Designation establishing Series D Preferred Stock with an initial conversion price of $18.00 per share. Each share of Series D Preferred Stock is convertible into common stock by a conversion ratio equal to the stated value of the Series D Preferred Stock share divided by the Series D Preferred Stock conversion price. In the event that the Company declares a dividend payable in cash or stock to holders of any class of the Company's stock (including the Series B Preferred Stock), the holder of a share of Series D Preferred Stock will be entitled to receive an equivalent dividend on an as-converted basis. In the event of a liquidation of the Company, the holders of Series D Preferred Stock will share in the distribution of the Company's net assets on an as-converted basis equally with the Series C Preferred Stock and Series E Preferred Stock, subordinate only to the senior position of the Series B Preferred Stock. The number of shares of common stock into which a holder may convert Series D Preferred Stock is limited by a beneficial ownership limitation of 9.99%. The Series D Preferred Stock conversion price and the floor price will be subject to equitable adjustment in the event of stock splits, reverse splits and similar events. The Series D Preferred Stock is non-voting.

During the nine months ended September 30, 2025, 255,474 shares of Series D Preferred Stock were converted into 371,559 shares of common stock.

*Issuance of Series E Preferred Stock*

Each share of Series E Preferred Stock has a stated value of $10.00 and is convertible into shares of the Company's common stock pursuant to the terms and conditions set forth in a Certificate of Designation establishing Series E Preferred Stock with an initial conversion price of $20.00, subject to an automatic adjustment on October 31, 2025 equal to the average of the VWAPs for the five trading days immediately preceding the Measurement Date (390 days after the closing under the Debt Exchange Agreement), subject to a "Floor Price" of $2.50 per share. The Series E Preferred Stock conversion price and the floor price will be subject to equitable adjustment in the event of stock splits, reverse splits and similar events. Each share of Series E Preferred Stock is convertible into common stock by a conversion ratio equal to the stated value of the Series E Preferred Stock share divided by the Series E Preferred Stock conversion price. The number of shares of common stock into which a holder may convert Series E Preferred Stock is limited by a beneficial ownership limitation, which restricts the number of shares of common stock that the holder and its affiliates may beneficially own after the conversion to 9.99%. The Series E Preferred Stock is non-voting.

Pursuant to the terms of the Debt Exchange Agreement on October 7, 2024, the Company issued a total of 200,000 shares of Series E Preferred Stock to certain lenders, and they released the Company from liability for $2.0 million of unsecured debt.

 

**Beeline Holdings, Inc.**

**Notes to Consolidated Financial Statements**

**September 30, 2025**

**(Unaudited)**

 

*Issuance of Series F and F-1 Preferred Stock*

Each share of Series F and F-1 Preferred Stock has a stated value of $0.50 and is convertible into shares of the Company's common stock pursuant to the terms and conditions set forth in a Certificate of Designation establishing Series F and F-1 Preferred Stock with an initial conversion price of $5.00 per share. Each share of Series F and F-1 Preferred Stock is convertible into common stock by a conversion ratio equal to the stated value of the Series F and F-1 Preferred Stock share divided by the Series F and F-1 Preferred Stock conversion price. The number of shares of Common Stock into which a holder may convert Series F and F-1 Preferred Stock is limited by a beneficial ownership limitation, which restricts the number of shares of the Company's common stock that the holder and its affiliates may beneficially own after the conversion to 4.99%. That beneficial ownership limitation does not, however, apply to holders who are subject to Section 16 of the Exchange Act by virtue of being an executive officer or director of the Company which presently only applies to the Company's Chief Executive Officer.

The conversion of Series F and F-1 Preferred Stock was approved at a special meeting of stockholders on March 7, 2025. During the nine months ended September 30, 2025, 57,529,515 and 424,980 shares of Series F and F-1 Preferred Stock, respectively, were converted into 5,795,458 shares of common stock.

On July 23, 2025, the Company entered into an agreement with a holder of and effected the exchange of 8,356,151 shares of Series F Preferred Stock and 68,951 shares of Series F-1 Preferred Stock of the Company in exchange for the issuance to the holder of 8,425,102 shares of Series A Preferred Stock.

*Issuance of Series G Preferred Stock* 

Each share of Series G Preferred Stock has a stated value of $0.51 and is convertible into shares of the Company's common stock pursuant to the terms and conditions set forth in a Certificate of Designation establishing Series G Preferred Stock with an initial conversion price of $5.10 per share. The conversion price is subject to adjustment as provided therein including that in the event of an issuance of common stock or common stock equivalents at a price per share that is less than the conversion price, the conversion price then in effect will be reduced to such lower price per share, subject to certain exceptions and to a floor price of 20% of the Nasdaq Minimum Price as of the initial closing date of the offering of such Series G Preferred Stock (see below for triggering event). The result of such provision is that more shares of common stock will be issuable upon conversions of the Series G Preferred Stock if there is a subsequent issuance at a lower price per share. Each share of Series G Preferred Stock is convertible into common stock by a conversion ratio equal to the stated value of the Series G Preferred Stock share divided by the Series G Preferred Stock conversion price. The Series G Preferred Stock conversion price is subject to equitable adjustment in the event of a stock split, reverse split, and similar events. The number of shares of Common Stock into which a holder may convert Series G Preferred Stock will be limited by a beneficial ownership limitation, which restricts the number of shares of the Company's common stock that the holder and its affiliates may beneficially own after the conversion to 4.99%. The holder of Series G Preferred Stock has no conversion or voting rights prior to stockholder approval of such actions. In the event of a liquidation of the Company, the holders of Series G Preferred Stock will share in the distribution of the Company's net assets on an as-converted basis, subordinate only to the Series B Preferred Stock, Series C Preferred Stock, Series D Preferred Stock, and Series E Preferred Stock. The conversion of Series G Preferred Stock was approved at a special meeting of stockholders on March 7, 2025.

On April 25, 2025, the Company filed with the Nevada Secretary of State a Certificate of Amendment to the Series G Preferred Stock Certificate of Designations. The Certificate of Amendment provides that (i) the beneficial ownership limitation on conversion set forth in the Certificate of Designation will not apply to a holder who is otherwise subject to Section 16(a) of the Securities Exchange Act of 1934 by virtue of being an executive officer or director of Company, and (ii) the anti-dilution price protection adjustment rights with respect to subsequent offerings or issuances of securities will not apply to an equity line of credit or at-the-market offering facility or as otherwise determined by the holder(s) of a majority of the Series G Preferred Stock.

During the nine months ended September 30, 2025, the Company sold 6,417,159 shares of Series G Preferred Stock and five-year Warrants to purchase a total of 320,862 shares of common stock for total gross proceeds of $3.3 million. The Company incurred offering costs of $6,270 related to the offering. In addition, the Company's Chief Executive Officer converted his $0.7 million bridge loan into $0.7 million of units comprised of 1,372,549 shares of Series G Preferred Stock and five-year Warrants to purchase a total of 68,628 shares of common stock.

**Beeline Holdings, Inc.**

**Notes to Consolidated Financial Statements**

**September 30, 2025**

**(Unaudited)**

On March 25, 2025 ("the trigger date"), the Company sold common shares under the ELOC Agreement at $1.67 per share, which was less than the Series G Preferred Stock original conversion price of $5.10 per share, resulting in the reduction of the conversion price of the Series G Preferred Stock to $1.67 per share as a result of the price protection adjustment related to the conversion of the Series G Preferred Stock. The Company recorded a deemed dividend related to the Series G Preferred Stock price protection of $1.5 million. The deemed dividend was computed as the fair value of the embedded conversion option with the reduced conversion price of $1.67 less the fair value of the embedded conversion option with the original conversion price of $5.10 as computed on the trigger date. See below for the warrant related deemed dividend allocation and assumptions used in the Black-Scholes model.

During the nine months ended September 30, 2025, 4,745,371 shares of Series G Preferred Stock were converted into 534,945 shares of common stock.

In January 2025, the Company issued a consultant 245,098 shares of Series G Preferred Stock as payment for past legal services of $0.1 million included in stock to be issued on the consolidated balance sheets as of December 31, 2024, and 19,698 shares of Series G Preferred Stock as payment in 2025.

*Stock-Based Compensation*

On September 8, 2016, the Company adopted the 2016 Equity Incentive Plan (the "2016 Plan"). As of September 30, 2025, there were 29 options under the 2016 Plan. On February 6, 2025, the 2016 Plan was terminated and replaced with the 2025 Equity Incentive Plan, and on August 1, 2025 the Board of Directors adopted the Amended and Restated 2025 Equity Incentive Plan (the "2025 Plan").

*2025 Equity Incentive Plan*

On August 1, 2025, the Company's Board of Directors adopted the 2025 Plan and authorized the 2025 Plan to be submitted to stockholders of the Company for approval. The 2025 Plan initially authorized 4,588,802 shares of common stock, which was equal to 15% of the outstanding shares of common stock on a fully-diluted basis available for award under the 2025 Plan. The 2025 Plan provides for an annual increase to such available number of shares by 5% of the shares of common stock outstanding on a fully-diluted basis each year for a period of seven years, with the first such increase to occur on January 1, 2026. The 2025 Plan provides for the issuance of incentive stock options, non-statutory stock options, share appreciation rights, restricted shares, restricted share units, and other share-based awards.

The following grants under the 2025 Plan were all made subject to stockholder approval of the Plan which occurred on October 2, 2025. On May 28, 2025, the Board of Directors of the Company approved grants of cash and restricted stock to its non-employee directors and stock options to senior executives and employees. On August 1, 2025, the Board of Directors approved a grant of restricted stock to two persons for past services as directors of a subsidiary. On September 4, 2025, the Board of Directors approved a grant of restricted stock units to an employee for past services to the Company. Due to stockholder approval after September 30, 2025, the grants were not accounted for as of September 30, 2025.

The cash grants were not subject to stockholder approval. The cash awarded to four non-employee directors, is payable quarterly in arrears and subject to continued service. Three board members elected to receive 100% of the cash awards in shares of restricted common stock at $0.92 per share and one board member elected to receive 50% of the cash in common stock and 50% in cash.

 

**Beeline Holdings, Inc.**

**Notes to Consolidated Financial Statements**

**September 30, 2025**

**(Unaudited)**

*Stock Options*

A summary of all stock option activity as of and for the nine months ended September 30, 2025 is presented below:

---

| | | |
|:---|:---|:---|
|  | # of Options | Weighted-Average Exercise Price |
| Outstanding as of December 31, 2023 | 212 | $579.50 |
| Options forfeited | (108) | 1215.91 |
| Outstanding as of December 31, 2024 | 104 | $304.34 |
| Options forfeited | (75) | 304.39 |
| Outstanding and exercisable as of September 30, 2025 | 29 | $339.49 |

---

The aggregate intrinsic value of options outstanding as of September 30, 2025 was $0 and all options had vested.

The Company uses the Black-Scholes valuation model to measure the grant-date fair value of stock options. The grant-date fair value of stock options issued to employees is recognized on a straight-line basis over the requisite service period. Stock-based awards issued to nonemployees are recorded at fair value on the measurement date and are subject to periodic market adjustments as the underlying stock-based awards vest.

To determine the fair value of stock options using the Black-Scholes valuation model, the calculation takes into consideration the effect of the following:

● Exercise price of the option

● Fair value of the common stock on the date of grant

● Expected term of the option

● Expected volatility over the expected term of the option

● Risk-free interest rate for the expected term of the option

The calculation includes several assumptions that require management's judgment. The expected term of the options is calculated using the simplified method described in GAAP. The simplified method defines the expected term as the average of the contractual term and the vesting period. Estimated volatility is derived from volatility calculated using historical closing prices of common shares of similar entities whose share prices are publicly available for the expected term of the options. The risk-free interest rate is based on the U.S. Treasury constant maturities in effect at the time of grant for the expected term of the options.

The Company did not issue any additional stock options during the nine months ended September 30, 2025.

*Warrants*

During the nine months ended September 30, 2025, the Company sold shares of Series G Preferred Stock and in conjunction issued warrants to purchase a total of 320,862 shares of common stock. The Company recorded offering costs of $6,270 as of September 30, 2025. In addition, the Company's Chief Executive Officer converted his $0.7 million bridge loan into $0.7 million of units comprised of 1,372,549 shares of Series G Preferred Stock and five-year Warrants to purchase a total of 68,628 shares. The Warrants have a term of five years from issuance and are exercisable at an exercise price of $6.50 per share.

In July 2025, the Company issued warrants to purchase a total of 25,000 shares of common stock in connection with a settlement. The warrants have a term of four years from issuance and are exercisable at an exercise price of $1.00 per share. *See Note 20 – Subsequent Events.*

The estimated fair value of the new warrants issued in 2025 was based on a combination of closing market trading price on the date of issuance for the public offering warrants, and the Black-Scholes option-pricing model, using the weighted average assumptions below:

---

| | | |
|:---|:---|:---|
| Volatility | 100-139 | 100-139% |
| Risk-free interest rate |  | 3.94% - 4.46 |
| Expected term (in years) |  | 4.00-5.00 |
| Expected dividend yield |  |  |
| Fair value of common stock |  | $0.66 - $8.60 |

---

**Beeline Holdings, Inc.**

**Notes to Consolidated Financial Statements**

**September 30, 2025**

**(Unaudited)**

A summary of all Warrant share activity as of and for the nine months ended September 30, 2025 is presented below:

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **Warrant Shares** | **Weighted-Average Remaining Life (Years)** | **Weighted-Average Exercise Price** | **Aggregate Intrinsic Value (in millions)** |
| Outstanding as of December 31, 2023 | 20167 | 3.8 | $348.70 | $- |
| Granted | 414494 | 4.6 | 18.90 | 1 |
| Expired | (119605) | 4.3 | 50.00 | - |
| Outstanding as of December 31, 2024 | 315056 | 4.6 | 28.20 | 1 |
| Additions due to price protection adjustment | 5430468 | 4.5 | 0.66 | 17.9 |
| Issued with Series G Preferred Stock units sold | 389490 | 4.3 | 0.66 | 1.3 |
| Granted | 25000 | 3.8 | 1.00 | 0.1 |
| Expired | (500) | - | (788.00) | - |
| Outstanding as of September 30, 2025 | 6159514 | 4.4 | $1.79 | $20.0 |

---

On March 25, 2025, the Company sold shares under the ELOC Agreement at $1.67 per share, which was less than the exercise price of the Warrants issued in the Company's Series G Preferred Stock offering, resulting in the reduction of the exercise price of the warrants to $1.67 per share and an increase in common shares issuable upon exercise of 1,774,986 under the full price protection adjustment of the Warrants. On June 16, 2025, the Company sold shares under the ELOC Agreement at $0.66 per share, which was less than the exercise price of the Warrants adjusted in March 2025, resulting in the reduction of the exercise price of the warrants to $0.66 per share and an increase in common shares issuable upon exercise of 3,655,482 under the full price protection adjustment of the Warrants. The Company recorded an additional deemed dividend related to the Warrants price protection of $5.2 million for the nine months ended September 30, 2025.

*Beeline Warrants*

In the Merger Agreement, the Company agreed to assume 5,868 outstanding Beeline Warrants with an exercise price of $231.20 per share. The new Warrants have not been issued as of the date of this Report.

**16. COMMITMENTS AND CONTINGENCIES**

*Legal Matters*

Except as set forth below, the Company is not currently subject to any other material legal proceedings; however, it could be subject to legal proceedings and claims from time to time in the ordinary course of its business, or legal proceedings it considered immaterial may in the future become material. Regardless of the outcome, litigation can, among other things, be time consuming and expensive to resolve, and can divert management resources.

On October 7, 2025, Mendez et. al. v. Optimal Blue, LLC, et. al. filed a class action complaint in the US District Court, Middle District of Tennessee alleging the Company's use of Optimal Blue's pricing software violated federal antitrust laws against 28 defendants, of which the Company is included as a defendant. The Company intends to defend the case vigorously.

 

**Beeline Holdings, Inc.**

**Notes to Consolidated Financial Statements**

**September 30, 2025**

**(Unaudited)**

 

*Government Regulations Affecting Mortgage Loan Origination*

Beeline Financial operates in a heavily regulated industry that is highly focused on consumer protection. The extensive regulatory framework to which Beeline Financial is subject includes U.S. federal and state laws and regulations.

Governmental authorities and various U.S. federal and state agencies have broad oversight and supervisory authority over all aspects of Beeline Financial's business.

Under the Dodd-Frank Wall Street Reform and Consumer Protection Act (the "Dodd-Frank Act"), the Consumer Financial Protection Bureau (the "CFPB") was established to ensure, among other things, that consumers receive clear and accurate disclosures regarding financial products and to protect consumers from hidden fees and unfair, deceptive or abusive acts or practices. The CFPB's jurisdiction includes those persons producing or brokering residential mortgage loans. It also extends to Beeline Financial's other lines of business title insurance. The CFPB has broad supervisory and enforcement powers with regard to non-depository institutions, such as Beeline Financial, that engage in the production and servicing of home loans.

The following discussion should be read in conjunction with the efforts of the Trump Administration to shut down the CFPB. Presently, there is a lower federal court order enjoining the efforts to eliminate the CFPB, although the order has been appealed.

As part of its enforcement authority, the CFPB can order, among other things, rescission or reformation of contracts, the refund of moneys or the return of real property, restitution, disgorgement or compensation for unjust enrichment, the payment of damages or other monetary relief, public notifications regarding violations, remediation of practices, external compliance monitoring and civil money penalties. The CFPB has been active in investigations and enforcement actions and has issued large civil money penalties since its inception to parties the CFPB determines have violated the laws and regulations it enforces.

Effective October 1, 2022, the CFPB revised the definition of a qualified mortgage ("QM") which permits mortgage lenders to gain a presumption of compliance with the CFPB's ability to repay requirements if a loan meets certain underwriting criteria. Lenders are now required to comply with a new QM definition in order to receive a safe-harbor or rebuttable presumption of compliance under the ability-to-repay requirements of the Truth in Lending Act ("TILA") and its implementing Regulation Z. The revision to the QM definition created additional compliance burdens and removed some of the legal certainties afforded to lenders under the prior QM definition. Specifically, the revised QM rule eliminated the previous requirement limiting QMs to a 43% debt-to-income ratio ("DTI") and replaced it with pricing-based thresholds. Loans at 150 basis points or less over the average prime offer rate ("APOR") as of the date the interest rate is set, receive a safe harbor presumption of compliance, while loans between 151 and 225 basis points over the APOR benefit from a rebuttable presumption of compliance. The new rule also created new requirements for a lender to "consider" and "verify" a borrower's income and debts and associated DTI, along with several other underwriting requirements. Additionally, the new QM definition eliminated a path to regulatory compliance that was available for originating loans that were eligible to be sold to GSEs, which was heavily relied upon by a large segment of the mortgage industry. Due to the transition to the new QM definition, there may be residual compliance and legal risks associated with the implementation of these new underwriting obligations.

The CFPB's loan originator compensation rule prohibits compensating loan originators based on a term of a transaction, prohibits loan originators from receiving compensation directly from a consumer or another person in connection with the same transaction, imposes certain loan originator qualification and identification requirements, and imposes certain loan originator compensation recordkeeping requirements, among other things.

Beeline Financial is also supervised by regulatory agencies under state law. From time-to-time, Beeline Financial receives examination requests from the states in which Beeline Financial is licensed. State attorneys general, state mortgage licensing regulators, state insurance departments, and state and local consumer protection offices have authority to investigate consumer complaints and to commence investigations and other formal and informal proceedings regarding Beeline Financial's operations and activities. In addition, the government-sponsored enterprises, or GSEs, the Federal Housing Authority (the "FHA"), the Federal Trade Commission (the "FTC"), and others subject Beeline Financial to periodic reviews and audits. This broad and extensive supervisory and enforcement oversight will continue to occur in the future.

**Beeline Holdings, Inc.**

**Notes to Consolidated Financial Statements**

**September 30, 2025**

**(Unaudited)**

Beeline Financial maintains dedicated staff on the legal and compliance team to ensure timely responses to regulatory examination requests and to investigate consumer complaints in accordance with regulatory regulations and expectations.

**17. CONCENTRATIONS**

The Company maintains cash balances with several regional banks. The deposits are insured by the Federal Deposit Insurance Corporation up to $250,000 per depositor per bank. At various times throughout the year, cash balances held within these accounts may exceed the maximum insured amounts. As of September 30, 2025, there was one account that exceeded the limit by $1.0 million. As of December 31, 2024, there was one account that exceeded the limit by $0.5 million.

The Company relied on one lender for the warehouse line it uses to fund the mortgage loans it makes to its customers, which was limited to a maximum of $5.0 million, *see Note 10 – Warehouse Line of Credit*. In October 2025, the Company expanded its warehouse lines to $25.0 million tripling its prior $5.0 million line to $15.0 million and adding two new $5.0 million lines with new lenders, *see Note 20 – Subsequent Events*.

The Company sold its mortgage loans to six investors for the nine months ended September 30, 2025.

*Escrows Payable*

As a service to its clients, the Company administers escrow deposits representing undisbursed amounts received for payment of settlement and title services. Escrow deposits held by the Company was $1.1 million as of September 30, 2025. These amounts are not considered assets of the Company and, therefore, are excluded from the consolidated balance sheets. The Company remains contingently liable for the disposition of these deposits.

**18. NET INCOME (LOSS) PER COMMON SHARE**

Basic income (loss) per common share is computed by dividing net income (loss) by the weighted average number of common shares outstanding during the period, without considering any dilutive items. Potentially dilutive securities consist of the incremental common stock issuable upon exercise of preferred stock, stock options, and warrants. Potentially dilutive securities are excluded from the computation if their effect is anti-dilutive. There were no anti-dilutive common shares included in the calculation of income (loss) per common share as of September 30, 2025 and December 31, 2024. As of September 30, 2025, there were 10.3 million shares of common stock equivalents that were antidilutive due to the Company's net loss, including 4.1 million under preferred stock, 6.2 million under warrants and de minimus stock options.

**19. RELATED PARTY TRANSACTIONS**

Prior to its acquisition by the Company, Beeline Financial issued a note to a private company in which Joseph Freedman, a Board member of the Company, has an ownership interest. This note was for $0.1 million, accrues interest at 7% per annum and is due on demand. This note was subsequently repaid in January 2025. Additionally in January 2025, Mr. Freedman purchased 238,418 shares of Series G Preferred Stock and five-year Warrants to purchase a total of 11,921 shares of common stock for total gross proceeds of $0.1 million.

Beginnning in June 2025, the Company has partnered with a related party entity which is co-owned and managed by the Company's Chief Executive Officer, Nicholas Liuzza, in certain residential real estate transactions funded through the sale of a cryptocurrency token which is backed by real property. In these transactions, the related party entity purchases equity from homeowners seeking liquidity, funding such purchases from the sale of the cryptocurrency token. The Company provides the related party entity with certain services in connection with these transactions, specifically through providing access to its platform, and providing title and escrow services through Beeline Title Holdings in exchange for cash fees. Other than providing title and escrow services as noted above, the Company is not involved in any cryptocurrency or other transactions of the related party entity. During June 2025, Beeline Title Holdings closed its first such residential real estate transaction funded through the sale of a cryptocurrency token backed by real property. During the nine months ended September 30, 2025, the Company recorded $12,377 of revenue related to this transaction.

During March 2025, Mr. Liuzza, purchased 4,308,155 shares of Series G Preferred Stock and five-year Warrants to purchase a total of 215,409 shares of common stock for total gross proceeds of $2.2 million*.* In addition, Mr. Liuzza converted his $0.7 million bridge loan into $0.7 million of units comprised of 1,372,549 shares of Series G Preferred Stock and five-year Warrants to purchase a total of 68,628 shares.

**Beeline Holdings, Inc.**

**Notes to Consolidated Financial Statements**

**September 30, 2025**

**(Unaudited)**

In February and March of 2025 advanced the Company $0.1 million. In exchange for these advances, on April 25, 2025, the Board of Directors approved the advances as loans, and the Company issued Mr. Liuzza a promissory note which bears interest at a rate of 8% per annum and is payable on demand. On May 29, 2025, the Company amended the note to $0.4 million. As of September 30, 2025, the balance of the note was $0.4 million.

In January 2025, Mr. Liuzza entered into a SAFE with MagicBlocks, an entity in which the Company also has a 47.6% ownership interest.

Jessica Kennedy, Beeline Financial's Chief Operating Officer, owns a 5% interest in Tower Title, which is a vendor to certain subsidiaries of the Company. During the nine months ended September 30, 2025, the Company had transactions of $15,349 with Tower Title.

Beeline Loans partnered with CredEvolv on February 26, 2025 to help declined borrowers improve their credit and secure mortgage approval. Steve Romano is co-founder and President of CredEvolv. Beeline Financial engaged Mr. Romano to provide certain consulting services pursuant to an agreement dated July 29, 2024 to continue until terminated by written notice. As of September 30, 2025, the Company paid Mr. Romano $82,500 and had accrued $22,500 for consulting services. Mr. Romano serves on the Company's Board of Directors.

Beeline Loans is a member of The Mortgage Collaborative, which is an industry trade group founded by David Kittle. Beeline Loans pays membership fees of $3,500 to The Mortgage Collaborative. Mr. Kittle was appointed as Special Advisor to the Company and Board of Directors on March 12, 2025.

**20. SUBSEQUENT EVENTS**

*Warehouse Lines of Credit*

Subsequent to September 30, 2025, the Company expanded and diversified its warehouse lines to $25.0 million tripling its prior $5.0 million line and adding two new $5.0 million lines with new lenders.

*Stockholders' Equity* 

 

*ATM Agreement*

Subsequent to September 30, 2025, the Company sold 367,655 shares at a weighted average of $3.48 per share for gross proceeds of $1.3 million.

*Registered Direct Offering*

 

On November 11, 2025, the Company entered into a Securities Purchase Agreement with certain accredited investors, pursuant to which the Company sold to the Investors a total of 4,620,000 common shares at $1.60 per share, raising gross proceeds of $7.4 million, before deducting placement agent fees and other offering expenses payable by the Company.

*Series E Preferred Stock*

On October 21, 2025, the Company entered into a letter agreement with two investors pursuant to which the investors agreed to the redemption of their shares of Series E Preferred Stock in exchange for payment of $2.0 million. The Company redeemed the Series E Preferred Stock on November 12, 2025; and the shares were returned to the Company's treasury.

 

*Series F and F-1 Preferred Stock*

Subsequent to September 30, 2025, 1,697,197 shares of Series F and F-1 Preferred Stock were converted into 169,720 shares of common stock.

*Series G Preferred Stock*

Subsequent to September 30, 2025, 7,690,508 shares of Series G Preferred Stock were converted into 2,363,099 shares of common stock. Such conversions were effected after the Company's stockholders approved the issuance of additional shares of common stock underlying the Series G at the Company's Annual Meeting on October 2, 2025 in accordance with the rules of the Nasdaq Stock Market, LLC.

*2025 Equity Incentive Plan*

The Company received stockholder approval of the 2025 Plan at its annual meeting of stockholders on October 2, 2025. Subsequent to September 30, 2025, the Company issued 462,331 shares of restricted stock to members of the Board of Directors, 1,167,000 stock options to certain employees and 100,000 restricted stock units to an employee; all awards are subject to certain vesting requirements.

*Warrants*

In October 2025, the Company received $25,000 for the exercise of the 25,000 warrant shares related to a settlement and issued 25,000 shares of common stock at an exercise price of $1.00 per share as discussed in Note 15.

**Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS**

**Cautionary Note Regarding Forward-Looking Statements**

This Report contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, including statements regarding our expectations for prospective future growth, operating results and financial condition, potential future trends and developments within our industry and the U.S. economy generally, expectations and plans with respect to our products and services including the potential market for, timing, features, and demand for such products and services, prospective future fractional sale of home real estate transactions, and liquidity and sources of capital. Forward-looking statements are prefaced by words such as "anticipate," "expect," "plan," "could," "may," "will," "should," "would," "intend," "seem," "potential," "appear," "continue," "future," believe," "estimate," "forecast," "project," and similar words. We have based these forward-looking statements largely on our current expectations and assumptions regarding our business, the economy and other future conditions. Because forward-looking statements relate to the future, they are subject to inherent uncertainties, risks and changes in circumstances that are difficult to predict. We caution you, therefore, against relying on any of these forward-looking statements.

Our actual results may differ materially from those contemplated by the forward-looking statements for a variety of reasons, including, without limitation, the possibility that estimates, projections and assumptions on which the forward-looking statements are based prove to be incorrect, central bank interest rates and future interest rate changes, the risks arising from the impact of inflation, tariffs, the deterioration of the labor market of the United States, a recession which may result on the Company's business, prospective customers, and on the national and global economy, our need for additional capital to meet future goals and milestone targets, our ability to attract homeowners to our products and services, the potential for regulatory changes regarding cryptocurrency and digital assets, artificial intelligence, and other areas that impact the Company's business, and the ability of us and third parties on which we depend to comply with applicable regulatory requirements, the risk that software and technology infrastructure on which we depend fail to perform as designed or intended, and the Risk Factors contained in our Prospectus Supplement dated September 26, 2025 and Form 10-K filed April 15, 2025. Any forward-looking statement made by us in this presentation speaks only as of the date on which it is made. Factors or events that could cause our actual results to differ may emerge from time to time, and it is not possible for us to predict all of them. We undertake no obligation to publicly update any forward-looking statement, whether as a result of new information, future developments or otherwise, except as may be required by law.

**Objective**

The following discussion provides an analysis of the financial condition, cash flows and results of operations from management's perspective of Beeline Holdings, Inc. ("Beeline" or the "Company"). Our objective is to provide discussion of events and uncertainties known to management that are reasonably likely to cause the reported financial information not to be indicative of future operating results or of future financial condition and to also offer information that provides an understanding of our financial condition, cash flows and results of operations.

**Overview**

The Company was incorporated under the laws of Nevada in 2004.

*Merger*

On September 4, 2024, the Company entered into an Agreement and Plan of Merger and Reorganization (the "Merger") with Bridgetown Spirits Corp. ("Bridgetown Spirits") and Beeline Financial Holdings, Inc. ("Beeline Financial"). The Merger closed on October 7, 2024. On March 12, 2025, the Company changed its name to Beeline Holdings, Inc. (the "Company).

Beeline Financial was incorporated in Delaware on July 1, 2020 via a merger with Beeline Financial Holdings, Inc., a Rhode Island corporation founded on September 20, 2018.

*Debt Exchange Agreement*

On September 4, 2024, the Company and its subsidiary, Craft Canning + Printing ("Craft C+P"), entered into a Debt Exchange Agreement, which closed on October 7, 2024, resulting in the assignment by the Company of 720 barrels of spirits to Craft C+P, followed by the merger of Craft C+P into a limited liability company owned by certain creditors of the Company and the deconsolidation of Craft C+P. The Company accounted for the asset and equity transfers associated with the various transactions at fair value in accordance with ASC 470-60, *Debt - Troubled Debt Restructurings by Debtors*.

Subsequent to the execution of the Debt Exchange Agreement, the Company organized a subsidiary, Bridgetown Spirits, which was incorporated on October 3, 2024, and assigned the Company's business of manufacturing and marketing spirits to Bridgetown Spirits. On July 25, 2025, the Company disposed of its 53% interest in Bridgetown Spirits in exchange for the satisfaction of debt and as a result Bridgetown Spirits is no longer a subsidiary of the Company.

Upon completion of the debt exchange agreements, the Company was no longer involved in the business of spirits, and digital printing and mobile canning. The Company reports discontinued operations by applying the following criteria in accordance with ASC 205-20, *Presentation of Financial Statements – Discontinued Operations*: (1) Component of an entity; (2) Held for sale criteria; and (3) Strategic shift. Given that the effect of the debt exchange agreements meet all the criteria for classification of held for sale, the assets and liabilities of Bridgetown Spirits and Craft C+P were disposed of on July 25, 2025 and October 7, 2024, respectively. The assets and liabilities of Bridgetown Spirits have been classified as held for sale as of December 31, 2024. The operating results of Bridgetown Spirits and the spirits segment have been classified as discontinued operations for the three and nine months ended September 30, 2025 and 2024. The operating results of Craft C+P have been classified as discontinued operations during the three and nine months ended September 30, 2024.

The consolidated financial statements include the consolidated accounts of the Company and its wholly-owned subsidiaries, Beeline Financial Holdings, Inc. ("Beeline Financial"), Beeline Title Holdings, Inc. ("Beeline Title Holdings"), Beeline Mortgage Holdings, Inc. ("Beeline Mortgage"), Beeline Labs, Inc., and Beeline Loans Pty Ltd. ("Australian Subsidiary").

Beeline Title Holdings has four subsidiaries, Beeline Title, LLC ("Beeline Title"), Beeline Texas Title, LLC ("Beeline Texas Title"), Beeline Settlement Services, LLC ("Beeline Settlement Services"), and Beeline Title Agency, LLC ("Beeline Title Agency"). Beeline Mortgage Holdings has one subsidiary, Beeline Loans, Inc. ("Beeline Loans").

The Company has one majority-owned subsidiary, Nimble Title Holdings, Inc. ("Nimble Title Holdings"). Nimble Title Holdings is 50.1% owned by the Company and 49.9% owned by a former non-controlling stockholder of Beeline Financial.

Nimble Title Holdings has four subsidiaries, Nimble Title, LLC ("Nimble Title"), Nimble Title Agency, LLC ("Nimble Title Agency"), Nimble Texas Title, LLC ("Nimble Texas Title"), and Nimble Settlement Services, LLC ("Nimble Settlement Services").

The discussion which follows should be read in conjunction with the consolidated financial statements and notes to the consolidated financial statements contained in this Report.

**Our Business**

Beeline Loans, Beeline Title Holdings, Beeline Labs, and their subsidiaries, operate a full-service, direct-to-consumer digital mortgage lender specializing in conventional conforming and non-conforming residential first-lien mortgages, a title provider offering title, escrow, and closing services, and a technology platform licensing a proprietary software-as-a-service ("SaaS") product. Additionally, Beeline Loans, through a technology platform that it has built, supports a fractional equity product in partnership another company, which uses cryptocurrency backed by residential real estate.

The Company's performance is influenced by several key factors, including fluctuations in interest rates, economic conditions, housing supply, technological advancements, and its ability to acquire and retain customers. Interest rate changes have a direct impact on mortgage loan refinancing and overall mortgage loan volume. In a declining interest rate environment, refinancing activity typically increases, whereas rising interest rates tend to reduce refinancing and home purchase transactions. However, higher rates can also drive demand for cash-out refinancings and home equity loans. Following a prolonged period of historically low rates, interest rates began to rise in April 2021 due to inflation, increases in the federal funds rate, and other monetary policies. This upward trend, which continued through 2023, significantly reduced mortgage market activity and the pool of borrowers who could benefit from refinancing. Additionally, higher rates discourage homebuyers from entering the market and lead to a more competitive lending environment, compressing margins and reducing origination volumes.

The broader economic environment plays a crucial role in mortgage lending activity. Interest rate movements, employment trends, home price appreciation, and consumer confidence all affect mortgage origination volumes. Typically, home sales peak in the second and third quarters, but in 2022 and 2023, rising interest rates and ongoing housing supply constraints disrupted these seasonal trends. Despite steady consumer demand for credit, high interest rates and economic uncertainty may cause borrowers to delay financing decisions, leading to fluctuations in the Company's revenue and financial performance.

Limited housing supply has constrained home purchase activity. Rising interest rates have further exacerbated this issue by increasing home prices, reducing affordability, and discouraging transactions. However, the Company believes that persistent imbalances between supply and demand will ultimately drive greater home construction, expanding housing inventory and stimulating future mortgage activity.

The Company's ability to attract and retain customers depends on delivering a seamless and competitive digital mortgage experience. The shift toward digital transactions, accelerated by the COVID-19 pandemic, has increased consumer willingness to engage in high-value online purchases, including mortgage applications. The Company's platform is designed to provide a convenient and efficient digital experience, positioning it favorably against traditional mortgage origination methods. With Millennial and Generation Z homeownership rates on the rise, The Company anticipates continued growth in demand for digital mortgage solutions.

Technological innovation remains central to the Company's strategy. The Company's proprietary technology enhances efficiency, reduces costs, and improves loan processing quality. By automating key origination tasks, the Company streamlines interactions for consumers, employees, and partners. Its intuitive digital interface minimizes reliance on paper applications and manual processes, enabling faster and more efficient loan transactions. Continued investment in automation and technology development will further reduce production costs and enhance customer acquisition efforts.

Customer acquisition is another critical component of the Company's success. The Company aims to expand its reach while providing a highly personalized digital experience. If traditional customer acquisition methods prove insufficient, especially in challenging market conditions, the Company may need to invest additional resources in sales and marketing to maintain growth. Increased marketing expenditures could elevate service costs, making it essential to balance customer acquisition efforts with cost efficiency.

In the ordinary course of the Company's operations, it finances the majority of its loan volume on a short-term basis, typically less than 10 days, mainly utilizing three warehouse lines of credit with a capacity of $25.0 million. The repayments of the Company's borrowings come from the revenue generated by selling its loans to a network of purchasers.

In 2024, the Company made significant investments in its platform to leverage mortgage origination opportunities, despite overall lower volumes compared to 2020 and 2021 due to fluctuating interest rates. In the fourth quarter, a temporary decline in the 10-year Treasury rate drove a notable increase in loan originations, reinforcing the Company's belief that interest rates, housing supply, and affordability will remain key factors influencing future volume. Additionally, the Company has expanded its focus on its B2B SaaS strategy, which is also subject to macroeconomic conditions.

To measure operational efficiency and growth, the Company tracks a range of performance metrics in its lending and title businesses, including production data. Beeline Loans, the principal operating subsidiary of the Company, uses data to track margin and gain-on-sale revenue. The title companies use data to track file revenue. The Company uses industry tools to benchmark its margin and note rates against the broader mortgage origination market. The Company also evaluates key business drivers for its subsidiaries by monitoring revenue, unit sales, and SaaS (B2B) growth potential. Additionally, the Company assesses customer acquisition costs and profitability per loan to optimize financial performance. These key indicators help gauge progress toward our strategic and long-term growth objectives.

**Recent Developments**

***Business Trends***

From January through September 2025, inflation had been steadily moderating from earlier high levels, aided by improved supply chains, softer commodity and energy prices, and some cooling in housing-related costs. But by the late summer and into September, the pace of disinflation slowed and even reversed slightly: the jump to a 3.0% annual rate in September signals that inflation remains more persistent than many hoped. Early in the year, the decline was fairly smooth: energy-led relief, moderate food inflation, and some relief in goods prices especially as supply chains stabilized. However, services inflation, especially in housing (shelter), medical care, and insurance, remained resilient. The rebound in gasoline and energy prices in September (month-over-month) was a reminder that commodity risk remains, and that even a small monthly energy jump can push the headline number upward. Although the monthly gain in shelter (owners' equivalent rent) was modest in September (just 0.1 %), a positive sign, the annual rate remains elevated and still contributes a large weight to the total index. The fact that core inflation (excluding food/energy) is still at ~3.0% means underlying inflation pressures are not yet fully resolved. Further, the full impact of the imposition of tariffs by the U.S. and foreign countries remains unknown, and future developments in tariffs and other geopolitical activity present further uncertainty. Because of this mixed picture, the Federal Reserve is likely to remain cautious. While the headline 3.0% rate is far better than the highs of 2022–23, it is still above the Federal Reserve's longer-run 2% target.

*Beeline Labs*

In July 2025, the Company's subsidiary, Beeline Labs, launched BlinkQC, a SaaS platform designed to automate pre-close quality control ("QC") reviews for mortgage loan files. Beeline Loans uses BlinkQC in its own operation for its pre-close QC. Later this year, Beeline Labs plans to license BlinkQC as SaaS to other mortgage companies. BlinkQC uses artificial intelligence to ingest loan document packages, extract and validate data, apply customizable rule sets, and generate compliance reports. Critical data points are being collected from the Beeline Labs launch and integrations are set to start in early December opening BlinkQC up to over 1,000 Banks and Independent Mortgage Banks. The Beeline Labs data and integrations are essential for a broader launch.

The initial release supports conventional loan packages and is offered on a flat rate per package. Based on current cost estimates, the product is expected to achieve gross margins of approximately 50%. Future enhancements, including FHA/VA loan support and integrations with loan origination systems, are in development.

Management believes BlinkQC will improve QC efficiency for mortgage lenders and represents a potential source of incremental revenue for the Company.

 

*BeelineEQUITY*

On June 25, 2025, Beeline Title closed, what it believes to be one of the first-ever fractional sale of home real estate transactions funded through the sale of a cryptocurrency with a related party partner who funds these transactions for us through the sale of a crypto token which is backed by real property. While neither the Company, nor its subsidiaries, mints the token, Beeline Title handles the settlement and title portions of these transactions for its client, who is minting the token (see below for more information about this company). The June transaction marked a major milestone in the evolution of blockchain-driven real estate finance, bridging decentralized finance with traditional title and escrow services.

In October 2025, the Company completed its first round of blockchain-recorded transactions through the BeelineEQUITY platform, becoming the first U.S. platform to tokenize residential home equity at scale. The Company closed six transactions and has pre-selected an additional 25 expected to close later in 2025. Beeline Loans provides customer acquisition services and support to the company minting the token and offering the equity exchange transaction. Beeline Loans receives 3.5% of the amount of equity sold and markets the product through its website as BeelineEQUITY. Beeline Title provides the title and closing services for each transaction—unless borrowers elect to use an outside title company.

As cryptocurrency adoption accelerates and becomes regulated by federal and state governments, the Company is positioning itself as a leader in this fast-moving ecosystem, offering trusted infrastructure to help lenders scale into a future where crypto and compliance go hand-in-hand. The Company collaborates with a related party company which is co-owned by the Company's Chief Executive Officer, Nicholas Liuzza, by which the company funds the transactions through the sale of a cryptocurrency token which is backed by real property. See Note 19 – Related Party Transactions, in the footnotes to the financial statements contained in this report.

Through September 30, 2025, the Company has derived $12,377 of revenue from this business. The Company provides title insurance services and an owner's title policy to the Company's partner as the buyer of the fractional equity. Beeline Title does not assume any unusual liability in favor of the related party. Beeline Title simply transacts in the normal course of business on these purchase transactions, issuing the owner's title insurance policy and acting as settlement/escrow agent. In any title transaction, the title agency will incur liability for potential losses under the title policy if the underlying title work is faulty for any reason or fraud or other errors exist that could not have been discovered at the time of policy issuance. Beeline Title has Errors and Omissions insurance in addition to other insurance coverages for any such issues.

**Results of Operations**

The Merger was structured and accounted for as a business combination with the Company as the acquirer of 100% of the controlling equity interests of Beeline and its subsidiaries. The Company's consolidated financial statements for the nine months ended September 30, 2024 do not include Beeline's results of operations. The Company's consolidated financial statements reflect the final purchase accounting adjustments in accordance with ASC 805, *Business Combinations*, whereby the purchase price was allocated to the assets acquired and liabilities assumed based upon their estimated fair values on the acquisition date. Due to the Merger, management believes that the consolidated results of operations for 2025 are not directly comparable to those of 2024, as the prior year reflects the performance of only the corporate segment.

Certain prior year amounts have been reclassified for consistency with the current year presentation. These reclassifications had no effect on the reported results of operations or cash flows. As a result of the merger, the statement of operations for the three and nine months ended September 30, 2024 represents the new structure and retrospectively reclassifies discontinued operations.

As a result of the Merger, the Company will amortize $15.2 million over a five-year period ending October 2029 and $0.4 million over a four-year period ending October 2028. This Merger-related amortization is $0.8 million each quarter and is non-cash.

Given these structural changes, management believes that segment-level reporting provides a more meaningful basis for evaluating performance. Accordingly, a comparative analysis of the Company's operating segments is presented below, which more accurately reflects the ongoing composition of the business.

***Three and Nine Months Ended September 30, 2025 Compared to the Three and Nine Months Ended September 30, 2024***

**Consolidated Results**

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| | | | | |
|:---|:---|:---|:---|:---|
|  | **Three Months Ended<br> September 30,** | **Three Months Ended<br> September 30,** | **Nine Months Ended<br> September 30,** | **Nine Months Ended<br> September 30,** |
| (Dollars in thousands, except per share amounts) | **2025** | **2024** | **2025** | **2024** |
| Revenues |  |  |  |  |
| &nbsp;&nbsp;&nbsp;Beeline Loans | $1953 | $- | $4239 | $- |
| &nbsp;&nbsp;&nbsp;Beeline Title | 391 | - | 1172 | - |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total net revenues | $2344 | $- | $5411 | $- |
| Net loss from continuing operations | $(3579) | $(846) | $(14284) | $(2112) |
| Net loss | $(3962) | $(1359) | $(15029) | $(4140) |
| Basic and diluted net loss per common share available to common stockholders | $(0.20) | $(6.60) | $(2.09) | $(22.84) |

---

For the three and nine months ended September 30, 2025, net loss from continuing operations increased to $3.6 million and $14.3 million, respectively, from $0.8 million and $2.1 million for the three and nine months ended September 30, 2024, respectively, reflecting the inclusion of Beeline's results of operations for 2025.

***Interest Expense.*** Interest expense, exclusive of the warehouse line of credit, was $0.1 million and $2.3 million for the three and nine months ended September 30, 2025, respectively, and $0.4 million and $1.0 million for the three and nine months ended September 30, 2024, respectively, primarily related to interest on debt and the amortization of debt and warrant related expenses.

***Preferred stock dividends.*** Preferred stock dividends were $37,500 and $0.1 million for each of the three and nine months ended September 30, 2025 and 2024, respectively, representing the Series B preferred stock dividend of 6% per annum.

***Deemed dividend - preferred stock Series G and warrant price protection.*** On March 25, 2025, the Company sold shares under the ELOC Agreement at $1.67 per share, which was less than the Series G Preferred Stock original conversion price of $5.10 per share, resulting in the reduction of the conversion price of the Series G Preferred Stock to $1.67 per share as a result of the price protection adjustment related to the conversion of the Series G Preferred Stock. Additionally, the Warrants issued in the Series G Preferred Stock offering had their exercise price reduced to $1.67 and resulted in an increase in common shares issuable upon exercise of 1,774,986 under the full price protection adjustment of the Warrants. On June 16, 2025, the Company sold shares under the ELOC Agreement at $0.66 per share, which was less than the exercise price of the Warrants adjusted in March 2025, resulting in the reduction of the exercise price of the warrants to $0.66 per share and an increase in common shares issuable upon exercise of 3,655,482 under the full price protection adjustment of the Warrants. The Company recorded a deemed dividend related to the price protection of $0 and $6.8 million for the three and nine months ended September 30, 2025, respectively.

**Segment Reporting**

The following discussion provides an analysis of the financial performance of each of our reportable segments consisting of Beeline Loans, Beeline Title Holdings and Corporate. We evaluate segment performance based on key financial and operational metrics, including revenue, operating income, and margin trends. The results of each segment are presented in accordance with our internal management reporting structure.

Beeline Loans is an AI-driven fintech mortgage lender that develops proprietary software in the form of major enhancements and new developments in its lending platform, including Beeline's Chat API "Bob."

Beeline Title Holdings provides title and loan closing services for Beeline's mortgage origination business. It provides similar services with respect to the Company's BeelineEQUITY product.

Corporate primarily consists of general corporate expenses, including public company costs, executive compensation, legal and regulatory compliance, and other administrative functions that support the overall business. This segment also includes holding company expenses, such as financing costs, accounting, legal, insurance, investor relations, and strategic corporate initiatives that are not directly attributable to any operating segment. As this segment does not generate revenue, its financial results primarily reflect overhead, and governance-related expenditures incurred to support the company's publicly traded status and corporate infrastructure.

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **Three Months Ended<br> September 30,** | **Three Months Ended<br> September 30,** | **Nine Months Ended<br> September 30,** | **Nine Months Ended<br> September 30,** |
| (Dollars in thousands) | **2025** | **2024** | **2025** | **2024** |
| **Revenues** |  |  |  |  |
| Beeline Loans | $1953 | $- | $4239 | $- |
| Beeline Title Holdings | 391 | - | 1172 | - |
| &nbsp;&nbsp;&nbsp;**Total net revenues** | $2344 | $- | $5411 | $- |
| **Net Loss from Continuing Operations** |  |  |  |  |
| Beeline Loans | $(1232) | $- | $(4809) | $- |
| Beeline Title | (76) |  | (320) |  |
| Corporate | (2271) | (846) | (9155) | (2112) |
| **Total net loss from continuing operations** | $**(3579)** | $**(846)** | $**(14284)** | $**(2112)** |

---

**Beeline Loans (For the Three and Nine Months Ended September 30, 2025)**

---

| | | |
|:---|:---|:---|
|  | **Three Months Ended** <br> **September 30, 2025** | **Nine Months Ended**<br> **September 30, 2025** |
| (Dollars in thousands) |  |  |
| Gain on sale of loans, net | $&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 1671 | $&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 3598 |
| Loan origination fees | 302 | 638 |
| Interest income (expense) |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Interest income | 90 | 232 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Interest expense | (112) | (241) |
| &nbsp;&nbsp;&nbsp;Interest income (expense), net | (22) | (9) |
| Other revenues | 2 | 12 |
| &nbsp;&nbsp;&nbsp;Total net revenues | 1953 | 4239 |
| Compensation, commissions and benefits | 948 | 2737 |
| General and administrative expenses | 112 | 471 |
| Depreciation and amortization | 805 | 2412 |
| Marketing and advertising | 700 | 1889 |
| Other operating expenses | 637 | 1536 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total operating expenses | 3202 | 9045 |
| Loss from operations | (1249) | (4806) |
| &nbsp;&nbsp;&nbsp;Interest expense | (17) | (37) |
| &nbsp;&nbsp;&nbsp;Gain on extinguishment of debt | 34 | 34 |
| **Net loss** | $**(1232)** | $**(4809)** |

---

For the three and nine months ended September 30, 2025, Beeline Loans originated $43.3 million and $98.2 million in residential mortgage loans, respectively; reported net revenues of $2.0 million and $4.2 million, respectively; and reported a net loss of $1.2 million and $4.8 million, respectively.

***Gain on sale of loans, net.*** Gain on sale of loans, net consists of all components related to the origination and sale of mortgage loans, including (1) net gain on sale of loans, which represents the premium we receive in excess of the loan principal amount and certain fees charged by investors upon sale of loans into the secondary market, (2) loan origination fees, credits, points and certain costs, (3) provision for or benefit from investor reserves, and (4) the change in fair value of interest rate lock commitment ("IRLCs" or "rate lock") and mortgage loans held for sale.

When the mortgage loan is sold into the secondary market (i.e. funded), any difference between the proceeds received and the current fair value of the loan is recognized in current period earnings in gain on sale of loans. Gain on sale of loans, net was $1.7 million and $3.6 million for the three and nine months ended September 30, 2025, respectively.

***Loan origination fees.*** Loan origination fees generally include underwriting and processing fees, investor fees, and other related expenses. Loan origination fees were $0.3 million and $0.6 million for the three and nine months ended September 30, 2025, respectively.

***Loan interest income and expense.*** Interest income is interest earned on mortgage loans held for sale and interest expense is paid on our loan funding facilities. Net interest expense was $22,307 and $9,197 for the three and nine months ended September 30, 2025, respectively.

***Compensation, commissions and benefits.*** Compensation, commissions and benefits were $0.9 million and $2.7 million for the three and nine months ended September 30, 2025, respectively.

***General and administrative expenses.*** General and administrative expenses consist primarily of rent and utilities and were $0.1 million and $0.5 million for the three and nine months ended September 30, 2025, respectively.

***Depreciation and amortization.*** Depreciation and amortization expenses consist primarily of amortization related to internal-use software and was $0.8 million and $2.4 million for the three and nine months ended September 30, 2025, respectively.

***Marketing and advertising.*** Marketing and advertising were $0.7 million and $1.9 million for the three and nine months ended September 30, 2025, respectively.

***Other operating expenses.*** Other operating expenses consist of expenses directly related to the origination of loans and are charged by investors at the sale of loans excluding interest, and software service providers. Other operating expenses were $0.6 million and $1.5 million for the three and nine months ended September 30, 2025, respectively.

**Beeline Title Holdings (For the Three and Nine Months Ended September 30, 2025)**

---

| | | |
|:---|:---|:---|
|  | **Three Months Ended** <br> **September 30, 2025** | **Nine Months Ended** <br> **September 30, 2025** |
| (Dollars in thousands) |  |  |
| Title fees | $&nbsp;&nbsp;&nbsp;&nbsp; 391 | $&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1172 |
| &nbsp;&nbsp;&nbsp;Total net revenues | 391 | 1172 |
| Compensation and benefits | 319 | 988 |
| General and administrative expenses | 34 | 119 |
| Marketing and advertising | (18) | 98 |
| Other operating expenses | 132 | 287 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total operating expenses | 467 | 1492 |
| **Net loss** | $**(76)** | $**(320)** |

---

For the three and nine months ended September 30, 2025, Beeline Title Holdings reported net revenues of $0.4 million and $1.2 million, respectively; reported and a net loss of $0.1 million and $0.3 million, respectively.

***Title fees.*** Title fees consist of title policy premiums and settlement fees charged to the borrower and seller on a transaction. Title fees were $0.4 million and $1.2 million for the three and nine months ended September 30, 2025, respectively.

***Compensation and benefits.*** Compensation and benefits were $0.3 million and $1.0 million for the three and nine months ended September 30, 2025, respectively.

***General and administrative expenses.*** General and administrative expenses consist primarily of shipping costs and professional services and were flat and $0.1 million for the three and nine months ended September 30, 2025, respectively.

***Marketing and advertising.*** Marketing and advertising were flat and $0.1 million for the three and nine months ended September 30, 2025, respectively.

***Other operating expenses.*** Other operating expenses consist primarily of expenses directly related to the settlement of loans and were $0.1 million and $0.3 million for the three and nine months ended September 30, 2025, respectively.

**Corporate**

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **Three Months Ended <br> September 30,** | **Three Months Ended <br> September 30,** | **Nine Months Ended <br> September 30,** | **Nine Months Ended <br> September 30,** |
| (Dollars in thousands) | **2025** | **2024** | **2025** | **2024** |
| Compensation and benefits | $722 | $146 | $2598 | $509 |
| General and administrative expenses | 725 | 289 | 3529 | 640 |
| Depreciation and amortization | 26 |  | 75 |  |
| Marketing and advertising |  |  | 12 |  |
| Other operating expenses | 35 | - | 140 | - |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total operating expenses | 1508 | 435 | 6354 | 1149 |
| &nbsp;&nbsp;&nbsp;Interest income | 4 |  | 5 |  |
| &nbsp;&nbsp;&nbsp;Interest expense | (52) | (409) | (2309) | (965) |
| &nbsp;&nbsp;&nbsp;Loss on extinguishment of debt | (719) |  | (644) |  |
| &nbsp;&nbsp;&nbsp;Change in equity method investment |  |  | 129 |  |
| &nbsp;&nbsp;&nbsp;Other | 4 | (2) | 18 | 2 |
| **Net loss** | $**(2271)** | $**(846)** | $**(9155)** | $**(2112)** |

---

For the three and nine months ended September 30, 2025, net loss from continuing operations increased to $2.3 million and $9.2 million, respectively, from $0.8 million and $2.1 million for the three and nine months ended September 30, 2024, respectively, reflecting the inclusion of Beeline's results of operations for 2025.

 ****

***Compensation and benefits.*** Compensation and benefits were $0.7 million and $2.6 million for the three and nine months ended September 30, 2025, respectively, and $0.1 million and $0.5 million for the three and nine months ended September 30, 2024, respectively.

***General and administrative expenses.*** General and administrative expenses consist primarily of public company costs professional fees, board compensation and rent. General and administrative expenses were $0.7 million and $3.5 million for the three and nine months ended September 30, 2025, respectively, and $0.3 million and $0.6 million for the three and nine months ended September 30, 2024, respectively.

***Depreciation and amortization.*** Depreciation and amortization expenses consist primarily of amortization related to the intangible asset of the customer list and were $24,563 and $0.1 million for the three and nine months ended September 30, 2025, respectively.

***Marketing and advertising.*** Marketing and advertising were $0 and $12,082 for three and nine months ended September 30, 2025, respectively.

***Other operating expenses.*** Other operating expenses consist of software service providers and were $24,810 and $0.1 million for the three and nine months ended September 30, 2025, respectively.

**Non-GAAP Financial Measure**

We report adjusted EBITDA, which is a financial measure not prepared in accordance with generally accepted accounting principles ("non-GAAP") that supplements our financial results presented in accordance with GAAP. This non-GAAP financial measure should not be considered in isolation and is not intended to be a substitute for any GAAP financial measures, but rather provides supplemental information that we believe helps investors better understand our business, our business model, and how we analyze our performance.

Non-GAAP financial measures have limitations in their usefulness to investors because they have no standardized meaning and are not prepared under any comprehensive set of accounting rules or principles. Accordingly, other companies, including companies in our industry, may calculate similarly titled non-GAAP financial measures differently or may use other measures to evaluate their performance, all of which could reduce the usefulness of our non-GAAP financial measures as tools for comparison.

We include a reconciliation of adjusted EBITDA to GAAP net loss, its most closely comparable GAAP measure. We encourage investors and others to review our condensed consolidated financial statements and notes thereto in their entirety included elsewhere in this quarterly report on Form 10-Q, not to rely on any single financial measure, and to consider adjusted EBITDA only in conjunction with its respective most closely comparable GAAP financial measure.

We believe this non-GAAP financial measure is useful to investors for supplemental period-to-period comparisons of our business and understanding and evaluating our operating results for the following reasons:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;● Adjusted EBITDA is widely used by investors and securities analysts to measure a company's operating performance without regard to items such as depreciation and amortization expense, interest and amortization on non-funding debt, income tax expense, stock-based compensation expense, and costs that are unique or non-recurring in nature or otherwise unrelated to our ongoing revenue-generating operations, all of which can vary substantially from company to company depending on their financing and capital structures;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;● We use adjusted EBITDA in conjunction with financial measures prepared in accordance with GAAP for adjusted purposes, including the preparation of our annual operating budget , as a measure of our core operating results and the effectiveness of our business strategy, and in evaluating our financial performance; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;● Adjusted EBITDA provides consistency and comparability with our past financial performance, facilitates period-to-period comparisons of our core operating results, and also facilitates comparisons with other peer companies, many of which use similar non-GAAP financial measures to supplement their GAAP results.

Further, although we use this non-GAAP measure to assess the financial performance of our business, it has limitations as an analytical tool, and should not be considered in isolation or as a substitute for analysis of our financial results as reported under GAAP. Some of these limitations are, or may in the future be, as follows:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;● Although depreciation and amortization expense is a non-cash charge, the assets being depreciated and amortized may have to be replaced in the future, and adjusted EBITDA does not reflect cash capital expenditure requirements for such replacements or for new capital expenditure requirements;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;● Adjusted EBITDA excludes stock-based compensation expense which is a significant recurring expense for our business and an important part of our compensation strategy;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;● Adjusted EBITDA does not reflect changes in, or cash requirements for, our working capital needs;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;● Adjusted EBITDA does not reflect interest expense, or the cash requirements necessary to service interest or principal payments on our non-funding debt, which reduces cash available to us; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;● The expenses and other items that we exclude in the calculation of adjusted EBITDA may differ from the expenses and other items, if any, that other companies may exclude from similarly titled non-GAAP measures when they report their operating results, and we may, in the future, exclude other significant, unusual or non-recurring expenses or other items from these financial measures.

Because of these limitations, adjusted EBITDA should be considered along with other financial performance measures presented in accordance with GAAP, and not as an alternative or substitute for our financial results prepared and presented in accordance with GAAP.

***Adjusted EBITDA***

We calculate adjusted EBITDA as net income (loss) adjusted for the impact of interest expense, depreciation and amortization expense, loss on extinguishment of debt, net loss from discontinued operations, stock-based compensation expense, and other non-recurring or non-core operational expenses.

The following table presents a reconciliation of net income (loss) to adjusted EBITDA:

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| | | | | |
|:---|:---|:---|:---|:---|
|  | **Three Months Ended<br> September 30,** | **Three Months Ended<br> September 30,** | **Nine Months Ended<br> September 30,** | **Nine Months Ended<br> September 30,** |
| (Dollars in thousands) | **2025** | **2024** | **2025** | **2024** |
| Net loss | $(3962) | $(1359) | $(15029) | $(4140) |
| &nbsp;&nbsp;&nbsp;Interest expense | 69 | 409 | 2346 | 965 |
| &nbsp;&nbsp;&nbsp;Depreciation and amortization | 831 |  | 2487 |  |
| &nbsp;&nbsp;&nbsp;Loss on extinguishment of debt | 685 |  | 610 |  |
| &nbsp;&nbsp;&nbsp;Net loss from discontinued operations | 383 | 513 | 745 | 2028 |
| &nbsp;&nbsp;&nbsp;Stock-based compensation expense |  | 40 | 130 | 172 |
| &nbsp;&nbsp;&nbsp;Merger-related expenses <sup>(1)</sup> | - | - | 321 | - |
| **Adjusted EBITDA** | $**(1994)** | $**(397)** | $**(8390)** | $**(975)** |

---

&nbsp;&nbsp;&nbsp;&nbsp;**(1)** Merger-related
 expenses include the costs related to the stockholder meeting on March 7, 2025 to approve the name changing to Beeline Holdings,
 Inc. and to approve the Series F and F-1 Preferred Stock (shares received in the merger) to convert to common shares, as well as
 costs related to the Nasdaq initial listing.

**Capital Resources and Liquidity**

***Statements of Cash Flows*.** For 2025, our primary capital requirements have been for cash used in operating activities and for the repayment of debt. Funds for our cash and liquidity needs have historically not been generated from operations but rather from short-term credit in the form of extended payment terms from suppliers as well as proceeds from loans and the sale of convertible debt and equity. We have been dependent on raising capital from debt and equity financing to meet our operating needs.

For the nine months ended September 30, 2025 and 2024, net cash used in operating activities of continuing operations increased to $12.1 million from $1.3 million primarily due to the inclusion of Beeline's net loss from continuing operations of $14.3 million for the nine months ended September 30, 2025.

For the nine months ended September 30, 2025, net cash used in investing activities of continuing operations was $0.5 million related to internal-use software development costs and the investment in SAFEs. For the nine months ended September 30, 2024, investing activities were nil.

For the nine months ended September 30, 2025, net cash provided by financing activities of continuing operations was $13.0 million primarily from $17.0 million raised from equity transactions and borrowings of $2.3 million from the warehouse line, offset by $7.3 million of debt principal. For the nine months ended September 30, 2024, net cash provided by financing activities of continuing operations was $1.5 million primarily from proceeds from secured credit facilities.

 ****

***Financial Policy***. We intend to maintain a disciplined financial policy and improve our credit metrics, which are critical to our lending partners.

***Liquidity Policy*.** We maintain a strong focus on liquidity and define our liquidity risk tolerance based on sources and uses to maintain a sufficient liquidity position to meet our business needs and financial obligations under both normal and stressed conditions. We believe that our consolidated liquidity and availability under our revolving credit facilities will be sufficient to meet our liquidity needs.

***Liquidity*.** Our primary sources of liquidity consist of cash and cash equivalents, cash flow from our operating businesses, proceeds from asset sales and dispositions, and short-term borrowing facilities, including revolving credit lines. Cash generation may fluctuate due to various factors, including seasonality, timing of loan originations and repayments, market conditions, and our ability to execute strategic asset sales or dispositions. As of September 30, 2025, the Company has $1.3 million in cash.

On December 31, 2024, the Company entered into entered into a Common Stock Purchase Agreement and related Registration Rights Agreement (collectively, the "ELOC Agreement") with an institutional investor (the "Purchaser") pursuant to which the Company agreed to sell, and the Purchaser agreed to purchase, up to $35 million of the Company's common stock, subject to a sale limit of 19.99% of the outstanding shares of the Company's common stock. On March 7, 2025, the Company entered into an Amended ELOC Agreement to reduce the amount from $35 million to $10 million. On September 8, 2025, the Company again amended the ELOC Agreement to increase the commitment amount by $10 million, to maximum total sales of up to $20 million, and to remove minimum closing price conditions for effecting purchases under the ELOC Agreement. As a result, the Company may sell up to $12.5 million under the ELOC Agreement (after giving effect to prior sales) beginning after January 11, 2026. During the nine months ended September 30, 2025, the Company sold and issued to the Purchaser 5,694,515 shares of common stock for gross proceeds of $7.5 million.

On April 30, 2025, the Company entered into an At The Market Offering Agreement (the "ATM Agreement") with Ladenburg Thalmann & Co., Inc., pursuant to which the Company may issue and sell over time and from time to time, to or through Ladenburg, up to $12.0 million of shares of the Company's common stock. During the nine months ended September 30, 2025, the Company sold 5,540,043 shares for gross proceeds of $7.0 million. Subsequent to September 30, 2025, the Company sold 367,655 shares for gross proceeds of $1.3 million.

During the nine months ended September 30, 2025, the Company sold 6,417,159 shares of Series G Preferred Stock and five-year Warrants to purchase a total of 320,862 shares of common stock for total gross proceeds of $3.3 million.

In October 2025, the Company expanded and diversified its warehouse lines to $25.0 million tripling its prior $5.0 million line and adding two new $5.0 million lines with new lenders in anticipation of rapid revenue growth and loan origination volume.

On November 11, 2025, the Company entered into a Securities Purchase Agreement with certain accredited investors, pursuant to which the Company sold to the Investors a total of 4,620,000 common shares at $1.60 per share, raising gross proceeds of $7.4 million.

The Company intends to continue raising capital through equity to meet its internal cash requirements. The availability of additional financing will be largely dependent on operating success, including improved gross margins as well as operational improvements, which will be necessary to attract investors. However, there can be no assurance that the Company will be successful in securing the necessary capital on favorable terms, or at all. The Company has no material off-balance sheet arrangements as of the date of this filing.

**Critical Accounting Policies and Estimates**

Critical accounting policies and practices are those that are both most important to the portrayal of the Company's financial condition and results, and require management's most difficult, subjective, or complex judgments, often as a result of the need to make estimates about the effects of matters that are inherently uncertain. The critical accounting policies and practices used by the Company in the financial statements for the nine months ended September 30, 2025 relate to the policies and practices the Company uses to account for:

***Mortgage loans held for sale and gains on sale of loans revenue recognition.*** Mortgage loans held for sale are carried at fair value under the fair value option in accordance with ASC 825, *Financial Instruments*, with changes in fair value recorded in gain on sale of loans, net on the consolidated statements of operations. The fair value of mortgage loans held for sale committed to investors is calculated based on the investor commitment.

Gains and losses from the sale of mortgage loans held for sale are recognized based upon the difference between the sales proceeds and carrying value of the related loans upon sale and are recorded in gain on sale of loans, net on the consolidated statements of operations. Sales proceeds reflect the cash received from investors through the sale of the loan and servicing release premium. Gain on sale of loans, net also includes the unrealized gains and losses associated with the changes in the fair value of mortgage loans held for sale, and the realized and unrealized gains and losses from derivative instruments.

Mortgage loans held for sale are considered sold when the Company surrenders control over the financial assets. Control is considered to have been surrendered when the transferred assets have been isolated from the Company, beyond the reach of the Company and its creditors; the purchaser obtains the right (free of conditions that constrain it from taking advantage of that right) to pledge or exchange the transferred assets; and the Company does not maintain effective control over the transferred assets through either an agreement that both entitles and obligates the Company to repurchase or redeem the transferred assets before their maturity or the ability to unilaterally cause the holder to return specific financial assets. The Company typically considers the above criteria to have been met upon acceptance and receipt of sales proceeds from the purchaser.

Mortgage loans sold to investors by the Company, and which met investor underwriting guidelines at the time of sale, may be subject to repurchase in the event of specific default by the borrower or subsequent discovery that underwriting standards were not met. The Company may, upon mutual agreement, indemnify the investor against future losses on such loans. Actual losses incurred are reflected as a reduction in gains on sale of loans, net in the consolidated statements of operations.

Since mortgage loans held for sale have maturity dates greater than one year from the balance sheet date but are expected to be sold in a short time frame (less than one year), they are recorded as current assets.

Changes in the balance of mortgage loans held for sale are included in cash flows from operating activities in the consolidated statements of cash flows in accordance with ASC 230-10-45-21, *Statement of Cash Flows*.

***Revenue recognition***

*Gains on Sale of Loans, Net*

See discussion above under "Mortgage Loans Held for Sale and Gain on Sale of Loans Revenue Recognition" and below under "Derivative Financial Instruments and Revenue Recognition".

*Loan Origination Fees* 

Loan origination fees represent revenue earned from originating mortgage loans. Loan origination fees generally represent flat per-loan fee amounts and are recognized as revenue at the time the mortgage loans are funded since the loans are held for sale.

*Interest Income*

Interest income on mortgage loans held for sale is recognized for the period from loan funding to sale based upon the principal balance outstanding and contractual interest rates. Revenue recognition is discontinued when loans become 90 days delinquent, or when, in management's opinion, the recovery of principal and interest becomes doubtful and the mortgage loans held for sale are put on nonaccrual status. For loans that have been modified, a period of six payments is required before the loan is returned to an accrual basis.

*Interest Expense*

Interest expense relating to the warehouse lines of credit is included in net revenues. Other interest expense is included in other (income)/expense.

*Title Fees*

Settlement fees and commissions earned at loan settlement on insurance premiums paid to title insurance companies.

*Other Revenues*

Fees received from a marketing partner that is embedded in the Company's point-of-sale journey for investment property customers. The partner pays Beeline for leads they receive from a customer opting in to use their insurance company for landlord insurance during the application process.

***Derivative financial instruments and revenue recognition.*** The Company holds and issues derivative financial instruments such as 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. The Company issues IRLCs to originate mortgage loans and the fair value of the IRLCs, adjusted for the probability that a given IRLC will close and fund, is recognized in gain on sale of loans, net on the consolidated statements of operations. Subsequent changes in the fair value of the IRLC are measured at each reporting period within gain on loans, net until the loan is funded. The Company accounts for all derivative instruments as free-standing derivative instruments and does not designate any for hedge accounting.

***Business Combination.*** The Company accounts for business combinations in accordance with ASC 805, *Business Combinations*. Under this guidance, the Company allocates the purchase price of an acquired business to the identifiable assets acquired and liabilities assumed at their estimated fair values as of the acquisition date. The excess of the purchase price over the estimated fair value of net assets acquired is recorded as goodwill.

Goodwill represents the excess purchase price over the fair value of the tangible net assets and intangible assets acquired in the business combination. The increases or decreases in the fair value of the Company's assets and liabilities can result from changes in fair values as of the acquisition date as determined during the one-year measurement period under ASC 805.

***Goodwill.*** Goodwill is the excess of the purchase price over the estimated fair value of identifiable net assets acquired in business combinations. The Company tests goodwill for impairment annually in the fourth quarter, or more frequently when indications of potential impairment exist. The Company monitors the existence of potential impairment indicators throughout the fiscal year. The Company may elect to perform either a qualitative test or a quantitative test to determine if it is more likely than not that the carrying value of a reporting unit exceeds its estimated fair value. Fair value reflects the price a market participant would be willing to pay in a potential sale of the reporting unit. If the estimated fair value of the Company exceeds its carrying value, then the Company concludes the goodwill is not impaired. If the carrying value of the Company exceeds its estimated fair value, the Company recognizes an impairment loss in an amount equal to the excess, not to exceed the amount of goodwill.

***Intangible assets.*** The Company accounts for certain finite-lived intangible assets at amortized cost and other certain indefinite-lived intangible assets at cost. Management reviews all intangible assets for probable impairment whenever events or circumstances indicate that the carrying amount of such assets may not be recoverable. If there is an indication of impairment, management would prepare an estimate of future cash flows (undiscounted and without interest charges) expected to result from the use of the asset and its eventual disposition. If these estimated cash flows were less than the carrying amount of the asset, an impairment loss would be recognized to write down the asset to its estimated fair value.

***Property and equipment, net.*** Property and equipment, including leasehold improvements and internal-use software, are recorded at cost, and are depreciated or amortized using the straight-line method over the estimated useful lives of the related assets, which range from three to five years. Leasehold improvements are amortized over the shorter of the lease term or the improvement's estimated useful life. Depreciation is not recorded on projects-in-process until the project is complete and the associated assets are placed into service or are ready for the intended use. Impairment of property and equipment than the internal-use software is evaluated under ASC 360, *Property, Plant, and Equipment.*

Under ASC 350-40, *Internal-Use Software*, the Company capitalizes certain qualifying costs incurred during the application development stage in connection with the development of internal-use software. Costs related to preliminary project activities are expensed as incurred and post-implementation activities will be expensed as incurred. Capitalized software costs are amortized over the useful life of the software, which is five years. Impairment of internal-use software is evaluated under ASC 350-40-35, *Subsequent Measurement,* on a qualitative basis and if indicators exist, then a quantitative analysis is performed under ASC 360.

***Stock-based compensation.*** The Company recognizes as compensation expense all stock-based awards issued to employees. The compensation cost is measured based on the grant-date fair value of the related stock-based awards and is recognized over the service period of stock-based awards, which is generally the same as the vesting period. The fair value of stock options is determined using the Black-Scholes valuation model, which estimates the fair value of each award on the date of grant based on a variety of assumptions including expected stock price volatility, expected terms of the awards, risk-free interest rate, and dividend rates, if applicable. Stock-based awards issued to nonemployees are recorded at fair value on the measurement date and recognized over the service periods.

**ITEM 3 – QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK**

As a "smaller reporting company" as defined by Item 10 of Regulation S-K, we are not required to provide information required by this item.

**ITEM 4 – CONTROLS AND PROCEDURES**

We maintain disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934 ("Exchange Act") that are designed to provide reasonable assurances that the information required to be disclosed in reports filed or submitted under the Exchange Act is recorded, processed, summarized, and reported within the time periods specified in the SEC rules and forms and that such information is accumulated and communicated to management, including the Chief Executive Officer and the Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosures.

We conducted an evaluation (pursuant to Rule 13a-15(b) of the Exchange Act)), under the supervision and with the participation of management, including the Chief Executive Officer and Chief Financial Officer, of the effectiveness of the Company's disclosure controls and procedures (as defined in Rule 13a-15(e)) as of the end of the period covered by this report. Based on the evaluation, the Chief Executive Officer and Chief Financial Officer has concluded that these disclosure controls and procedures were effective as of September 30, 2025.

There were no changes in internal control over financial reporting (as defined in Rule 13a-15(f) of the Exchange Act) during the quarter ended September 30, 2025, that materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

**PART II: OTHER INFORMATION**

**ITEM 1 – LEGAL PROCEEDINGS**

Except as set forth below, the Company is not currently subject to any other material legal proceedings; however, it could be subject to legal proceedings and claims from time to time in the ordinary course of its business, or legal proceedings it considered immaterial may in the future become material. Regardless of the outcome, litigation can, among other things, be time consuming and expensive to resolve, and can divert management resources.

On October 7, 2025, Mendez et. al. v. Optimal Blue, LLC, et. al. filed a class action complaint in the US District Court, Middle District of Tennessee alleging the Company's use of Optimal Blue's pricing software violated federal antitrust laws against 28 defendants, of which the Company is included as a defendant. The Company intends to defend the case vigorously.

**ITEM 1A – RISK FACTORS**

Not applicable to smaller reporting companies.

**ITEM 2 – UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS**

None.

**ITEM 3 – DEFAULTS UPON SENIOR SECURITIES**

None.

**ITEM 4 – MINE SAFETY DISCLOSURES**

Not applicable.

**ITEM 5 – OTHER INFORMATION**

During the quarter ended September 30, 2025, no director or officer adopted or terminated any Rule 10b5-1 trading arrangement or non-Rule 10b5-1 trading arrangement, as each term is defined in Item 408(a) of Regulation S-K.

**ITEM 6 – EXHIBITS**

---

| | |
|:---|:---|
| Exhibit No. | Description |
| 3.1 | [Amended and Restated Articles of Incorporation of the Company, as presently in effect, filed as Exhibit 3.1 to the Registration Statement on Form S-1 filed on November 14, 2011 (File No. 333-177918) and incorporated by reference herein](https://www.sec.gov/Archives/edgar/data/1534708/000130368111000192/euro_s110nov11x31.htm). |
| 3.2 | [Articles of Merger, filed as Exhibit 3.1 to the Registrant's Current Report on Form 8-K dated November 19, 2014 and filed on November 25, 2019 and incorporated by reference herein.](https://www.sec.gov/Archives/edgar/data/1534708/000161577414000415/s100504_ex3-1.htm) |
| 3.3 | [Certificate of Change, filed as Exhibit 3.1 to the Company's Current Report on Form 8-K dated October 6, 2016 and filed on October 11, 2016 and incorporated by reference herein.](https://www.sec.gov/Archives/edgar/data/1534708/000161577416007583/s104316_ex3-1.htm) |
| 3.4 | [Certificate of Change, filed as Exhibit 3.1 to the Company's Current Report on Form 8-K dated June 14, 2017 and filed on June 15, 2017 and incorporated by reference herein.](https://www.sec.gov/Archives/edgar/data/1534708/000149315217006712/ex3-1.htm) |
| 3.5 | [Certificate of Amendment of Articles of Incorporation, filed as an Exhibit to the Company's Current Report on Form 8-K dated August 13, 2021 and filed on August 31, 2021 and incorporated by reference herein.](https://www.sec.gov/Archives/edgar/data/1534708/000149315221021641/ex3-1.htm) |
| 3.6 | [Certificate of Designations, Preferences and Rights of the Series A Convertible Redeemable Preferred Stock, filed as Exhibit 4.1 to the Company's Current Report on Form 8-K filed on July 29, 2025 and incorporated herein by reference](https://www.sec.gov/Archives/edgar/data/1534708/000164117225021388/ex4-1.htm) |

---

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| | |
|:---|:---|
| 3.7 | [Certificate of Amendment to Designation of Series B Preferred Stock, filed as an Exhibit to the Company's Current Report on Form 8-K filed on October 25, 2021 and incorporated herein by reference.](https://www.sec.gov/Archives/edgar/data/1534708/000149315221026267/ex3-2.htm) |
| 3.8 | [Certificate of Change Pursuant to NRS 78.209 – filed May 3, 2023, filed as an Exhibit to the Company's Current Report on Form 8-K filed on May 9, 2023 and incorporated herein by reference.](https://www.sec.gov/Archives/edgar/data/1534708/000149315223015956/ex3a.htm) |
| 3.9 | [Certificate of Designation of Series C Preferred Stock filed on September 28, 2023 - filed as an Exhibit to the Company's Current Report on Form 8-K filed on September 29, 2023 and incorporated herein by reference](https://www.sec.gov/Archives/edgar/data/1534708/000149315223034849/ex3-a.htm) |
| 3.10 | [Certificate of Amendment of Articles of Incorporation - filed on January 2, 2024, filed as an Exhibit to the Company's Current Report on Form 8-K filed on January 4, 2024 and incorporated herein by reference.](https://www.sec.gov/Archives/edgar/data/1534708/000149315224001016/ex3-a.htm) |
| 3.11 | [Certificate of Designation of Series D Preferred Stock, filed as Exhibit 3-a to the Current Report on Form 8-K filed on October 7, 2024 and incorporated herein by reference](https://www.sec.gov/Archives/edgar/data/1534708/000149315224040338/ex3-a.htm) |
| 3.12 | [Certificate of Designation of Series E Preferred Stock, filed as Exhibit 3-b to the Current Report on Form 8-K filed on October 7, 2024 and incorporated herein by reference](https://www.sec.gov/Archives/edgar/data/1534708/000149315224040338/ex3-b.htm) |
| 3.13 | [Certificate of Designation of Series F Preferred Stock, filed as Exhibit 3-c to the Current Report on Form 8-K filed on October 7, 2024 and incorporated herein by reference](https://www.sec.gov/Archives/edgar/data/1534708/000149315224040338/ex3-c.htm) |
| 3.13(a) | [Certificate of Correction for Series F Convertible Preferred Stock, filed as Exhibit 3(b) to the Current Report on Form 8-K filed on December 3, 2024 and incorporated herein by reference](https://www.sec.gov/Archives/edgar/data/1534708/000149315224048508/ex3-b.htm) |
| 3.14 | [Certificate of Designation of Series F-1 Preferred Stock, filed as Exhibit 3-d to the Current Report on Form 8-K filed on October 7, 2024 and incorporated herein by reference](https://www.sec.gov/Archives/edgar/data/1534708/000149315224040338/ex3-d.htm) |
| 3.14(a) | [Certificate of Correction for Series F-1 Convertible Preferred Stock, filed as Exhibit 3(c) to the Current Report on Form 8-K filed on December 3, 2024 and incorporated herein by reference](https://www.sec.gov/Archives/edgar/data/1534708/000149315224048508/ex3-c.htm) |
| 3.15 | [Certificate of Designation of Series G Convertible Preferred Stock, filed as Exhibit 3(a)(1) to the Current Report on Form 8-K filed on December 3, 2024 and incorporated herein by reference](https://www.sec.gov/Archives/edgar/data/1534708/000149315224048508/ex3-a_1.htm) |
| 3.15(a) | [Certificate of Correction for Series G Convertible Preferred Stock, filed as Exhibit 3(a)(2) to the Current Report on Form 8-K filed on December 3, 2024 and incorporated herein by reference](https://www.sec.gov/Archives/edgar/data/1534708/000149315224048508/ex3-a_2.htm) |
| 3.15(b) | [Certificate of Amendment to Series G Convertible Preferred Stock, filed as Exhibit 3(a)(3) to the Current Report on Form 8-K filed on January 21, 2025 and incorporated herein by reference](https://www.sec.gov/Archives/edgar/data/1534708/000149315225003024/ex3-a_3.htm) |
| 3.15(c) | [Certificate of Amendment to Series G Convertible Preferred Stock, filed as Exhibit 3(a)(3) to the Current Report on Form 8-K filed on March 5, 2025 and incorporated herein by reference](https://www.sec.gov/Archives/edgar/data/1534708/000149315225009217/ex3-a_3.htm) |
| 3.15(d) | [Second Certificate of Amendment of Series G Preferred Stock, filed as Exhibit 3.1 to the Current Report on Form 8-K filed on April 30, 2025 and incorporated herein by reference](https://www.sec.gov/Archives/edgar/data/1534708/000164117225007749/ex3-1.htm) |
| 3.16 | [Certificate of Amendment of Articles of Incorporation, filed as Exhibit 3.1 to the Current Report on Form 8-K filed on January 30, 2025 and incorporated herein by reference](https://www.sec.gov/Archives/edgar/data/1534708/000149315225004261/ex3-1.htm) |
| 3.17 | [Certificate of Amendment to the Amended and Restated Articles of Incorporation, filed as Exhibit 3.1 to the Current Report on Form 8-K filed on March 13, 2025 and incorporated herein by reference](https://www.sec.gov/Archives/edgar/data/1534708/000149315225010198/ex3-1.htm) |
| 3.18 | [Second Amended and Restated Bylaws of the Registrant, filed as Exhibit 10-a to the Current Report on Form 8-K dated November 14, 2024 and filed on August 16, 2024 and incorporated by reference herein.](https://www.sec.gov/Archives/edgar/data/1534708/000149315224032708/ex10-a.htm) |
| 3.18(a) | [Amendment to Second Amended and Restated Bylaws, filed as Exhibit 3(a)(3) to the Current Report on Form 8-K filed on February 21, 2025 and incorporated herein by reference](https://www.sec.gov/Archives/edgar/data/1534708/000149315225007866/ex3-a_3.htm) |
| 10.1 | [ELOC Side Letter, filed as Exhibit 10.25 to the Registration Statement on Form S-1/A filed on January 3, 2025 and incorporated by reference herein.](https://www.sec.gov/Archives/edgar/data/1534708/000149315225000284/ex10-25.htm) |
| 10.2 | [Termination Agreement, filed as Exhibit 10.26 to the Registration Statement on Form S-1/A filed on January 3, 2025 and incorporated by reference herein.](https://www.sec.gov/Archives/edgar/data/1534708/000149315225000284/ex10-26.htm) |
| 10.3 | [Amended and Restated Common Stock Purchase Agreement (ELOC), filed as Exhibit 10.1 to the Current Report on Form 8-K filed on March 10, 2025 and incorporated by reference herein.](https://www.sec.gov/Archives/edgar/data/1534708/000149315225009635/ex10-1.htm) |
| 10.4 | [Amended and Restated Registration Rights Agreement (ELOC), filed as Exhibit 10.2 to the Current Report on Form 8-K filed on March 10, 2025 and incorporated by reference herein.](https://www.sec.gov/Archives/edgar/data/1534708/000149315225009635/ex10-2.htm) |
| 10.5 # \* | [Amended and Restated 2025 Equity Incentive Plan](ex10-5.htm) |
| 10.6 | [Letter Agreement for Amendment of Liuzza Warrants filed as Exhibit 10.1 to the Current Report on Form 8-K filed on April 30, 2025 and incorporated by reference herein.](https://www.sec.gov/Archives/edgar/data/1534708/000164117225007749/ex10-1.htm) |
| 10.7 | [At The Market Offering Agreement, dated April 30, 2025 – filed as Exhibit 1.1 to the Company's Current Report on Form 8-K filed on May 1, 2025 and incorporated herein by reference.](https://www.sec.gov/Archives/edgar/data/1534708/000164117225008124/ex1-1.htm) |

---

---

| | |
|:---|:---|
| 10.8 | [Debt Satisfaction Agreement dated July 25, 2025, filed as Exhibit 10.1 to the Company's Current Report on Form 8-K filed on July 29, 2025 and incorporated herein by reference](https://www.sec.gov/Archives/edgar/data/1534708/000164117225021304/ex10-1.htm) |
| 10.9 | [Senior Secured Original Issue Discount Promissory Note and Security Agreement dated July 25, 2025, filed as Exhibit 10.2 to the Company's Current Report on Form 8-K filed on July 29, 2025 and incorporated herein by reference](https://www.sec.gov/Archives/edgar/data/1534708/000164117225021304/ex10-2.htm) |
| 10.10 | [Form of Restricted Stock Agreement, filed as Exhibit 10.1 to the Company's Current Report on Form 8-K dated October 8, 2025 and incorporated herein by reference](https://www.sec.gov/Archives/edgar/data/1534708/000149315225017436/ex10-1.htm) |
| 10.11 | [Form of Restricted Stock Unit Agreement, filed as Exhibit 10.2 to the Company's Current Report on Form 8-K dated October 8, 2025 and incorporated herein by reference](https://www.sec.gov/Archives/edgar/data/1534708/000149315225017436/ex10-2.htm) |
| 10.12 | [Form of Option Agreement, filed as Exhibit 10.3 to the Company's Current Report on Form 8-K dated October 8, 2025 and incorporated herein by reference](https://www.sec.gov/Archives/edgar/data/1534708/000149315225017436/ex10-3.htm) |
| 10.13 | [Letter Agreement dated September 8, 2025, filed as Exhibit 10.40 to the Company's Registration Statement on Form S-1 dated October 21, 2025 and incorporated herein by reference](https://www.sec.gov/Archives/edgar/data/1534708/000149315225018826/ex10-40.htm) |
| 10.14 | [Letter Agreement dated October 22, 2025, filed as Exhibit 10.1 to the Company's Current Report on Form 8-K dated October 28, 2025 and incorporated herein by reference](https://www.sec.gov/Archives/edgar/data/1534708/000149315225019895/ex10-1.htm) |
| 31.1 \* | [Certification of Chief Executive Officer pursuant to Rule 13a-14(a).](ex31-1.htm) |
| 31.2 \* | [Certification of Chief Financial Officer pursuant to Rule 13a-14(a).](ex31-2.htm) |
| 32.1 \*\* | [Certification of Chief Executive Office pursuant to 18 U.S.C. Section 1350.](ex32-1.htm) |
| 32.2 \*\* | [Certification of Chief Financial Officer pursuant to 18 U.S.C. Section 1350.](ex32-2.htm) |
| 101.INS | Inline XBRL Instance Document |
| 101.SCH | Inline XBRL Taxonomy Schema Linkbase Document |
| 101.CAL | Inline XBRL Taxonomy Calculation Linkbase Document |
| 101.DEF | Inline XBRL Taxonomy Definition Linkbase Document |
| 101.LAB | Inline XBRL Taxonomy Labels Linkbase Document |
| 101.PRE | Inline XBRL Taxonomy Presentation Linkbase Document |
| 104 | Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101) |

---

---

| | |
|:---|:---|
| \* | Filed herewith. |
| \*\* | This exhibit is being furnished rather than filed and shall not be deemed incorporated by reference into any filing, |
|  | in accordance with Item 601 of Regulation S-K. |
| # | Indicates management compensatory plan, contract or agreement. |

---

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

---

| | | |
|:---|:---|:---|
|  | **BEELINE HOLDINGS, INC.** | **BEELINE HOLDINGS, INC.** |
| Date: November 14, 2025 | By: | */s/ Nicholas R. Liuzza, Jr.* |
|  |  | Nicholas R. Liuzza, Jr. |
|  |  | Chief Executive Officer |
| Date: November 14, 2025 | By: | */s/ Christopher R. Moe* |
|  |  | Christopher R. Moe |
|  |  | Chief Financial Officer |
|  |  | (Principal Financial Officer) |

---

---

| | | |
|:---|:---|:---|
| Date: November 14, 2025 | By: | */s/ Tiffany Milton* |
|  |  | Tiffany Milton |
|  |  | Chief Accounting Officer |
|  |  | (Principal Accounting Officer) |

---

## Exhibit 10.5

**Exhibit 10.5**

**BEELINE HOLDINGS, INC. AMENDED AND RESTATED** 

**2025 EQUITY INCENTIVE PLAN**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1. <u>Scope of Plan; Definitions</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) This 2025 Equity Incentive Plan (the "Plan") is intended to advance the interests of Beeline Holdings, Inc. (the "Company") and its Related Corporations by enhancing the ability of the Company to attract and retain qualified employees, consultants, Officers and directors, by creating incentives and rewards for their contributions to the success of the Company and its Related Corporations. This Plan will provide to (a) Officers and other employees of the Company and its Related Corporations opportunities to purchase common stock, par value $0.0001 ("Common Stock") of the Company pursuant to Options granted hereunder which qualify as incentive stock options ("ISOs") under Section 422(b) of the Internal Revenue Code of 1986 (the "Code"), (b) directors, Officers, employees and consultants of the Company and Related Corporations opportunities to purchase Common Stock of the Company pursuant to options granted hereunder which do not qualify as ISOs ("Non-Qualified Options"); (c) directors, Officers, employees and consultants of the Company and Related Corporations opportunities to receive shares of Common Stock of the Company which normally are subject to restrictions on sale ("Restricted Stock"); (d) directors, Officers, employees and consultants of the Company and Related Corporations opportunities to receive grants of restricted stock units ("RSUs"); and (e) directors, Officers, employees and consultants of the Company and Related Corporations opportunities to receive grants of stock appreciation rights ("SARs"). ISOs and Non-Qualified Options are referred to hereafter as "Options." Options, Restricted Stock, RSUs and SARs are sometimes referred to hereafter collectively as "Stock Rights." Any of the Options and/or Stock Rights may in the Board of Directors' or Compensation Committee's discretion be issued in tandem to one or more other Options and/or Stock Rights to the extent permitted by law.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) For purposes of the Plan, capitalized words and terms shall have the following meaning:

"Board" means the Board of Directors of the Company.

"Chairman" means the Chairman of the Board.

"Change of Control" means the occurrence of any of the following events: (i) the consummation of the sale or disposition by the Company of all or substantially all of the Company's assets in a transaction which requires shareholder approval under applicable state law; or (ii) the consummation of a merger or consolidation of the Company with any other corporation, other than a merger or consolidation which would result in the voting securities of the Company outstanding immediately prior thereto continuing to represent (either by remaining outstanding or by being converted into voting securities of the surviving entity or its parent) at least 50% of the total voting power represented by the voting securities of the Company or such surviving entity or its parent outstanding immediately after such merger or consolidation.

"Code" shall have the meaning given to it in Section 1(a).

"Common Stock" shall have the meaning given to it in Section 1(a).

"Company" shall have the meaning given to it in Section 1(a).

"Compensation Committee" means the compensation committee of the Board, if any, which shall consist of two or more members of the Board, each of whom shall be both an "outside director" within the meaning of Section 162(m) of the Code and a "non-employee director" within the meaning of Rule 16b-3. All references in this Plan to the Compensation Committee shall mean the Board when (i) there is no Compensation Committee or (ii) the Board has retained the power to administer this Plan.

"Disability" means "permanent and total disability" as defined in Section 22(e)(3) of the Code or successor statute.

"Disqualifying Disposition" means any disposition (including any sale) of Common Stock underlying an ISO before the later of (i) two years after the date of employee was granted the ISO or (ii) one year after the date the employee acquired Common Stock by exercising the ISO.

"Exchange Act" shall mean the Securities Exchange Act of 1934.

"Fair Market Value" shall be determined as of the last Trading Day before the date a Stock Right is granted and shall mean:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1) the closing price on the principal market if the Common Stock is listed on a national securities exchange or the OTCQB or OTCQX. In determining the closing price, after market trading shall not be included.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(2) if the Company's shares are not listed on a national securities exchange or the OTCQB or OTCQX, then the closing price if reported or the average bid and asked price for the Company's shares as reported by OTC Markets Group, Inc.;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(3) if there are no prices available under clauses (1) or (2), then Fair Market Value shall be based upon the average closing bid and asked price as determined following a polling of all dealers making a market in the Company's Common Stock; or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(4) if there is no regularly established trading market for the Company's Common Stock or if the Company's Common Stock is listed, quoted or reported under clauses (1) or (2) but it trades sporadically rather than every day, the Fair Market Value shall be established by the Board or the Compensation Committee taking into consideration all relevant factors including the most recent price at which the Company's Common Stock was sold.

"ISO" shall have the meaning given to it in Section 1(a).

"Non-Qualified Options" shall have the meaning given to it in Section 1(a).

"Officers" means a person who is an executive officer of the Company and is required to file ownership reports under Section 16(a) of the Exchange Act.

"Options" shall have the meaning given to it in Section 1(a).

"Plan" shall have the meaning given to it in Section 1(a).

"Related Corporations" shall mean a corporation which is a subsidiary corporation with respect to the Company within the meaning of Section 424(f) of the Code and any other entity in which the Company owns at least 45% of the equity.

"Restricted Stock" shall have the meaning contained in Section 1(a).

"RSU" shall have the meaning given to it in Section 1(a).

"SAR" shall have the meaning given to it in Section 1(a).

"Securities Act" means the Securities Act of 1933.

"Stock Rights" shall have the meaning given to it in Section 1(a).

"Trading Day" shall mean a day on which The Nasdaq Stock Market LLC is open for business.

This Plan is intended to comply in all respects with Rule 16b-3 ("Rule 16b-3") and its successor rules as promulgated under Section 16(b) of the Exchange Act for participants who are subject to Section 16 of the Exchange Act. To the extent any provision of the Plan or action by the Plan administrators fails to so comply, it shall be deemed null and void to the extent permitted by law and deemed advisable by the Plan administrators. <u>Provided</u>, <u>however</u>, such exercise of discretion by the Plan administrators shall not interfere with the contract rights of any grantee. In the event that any interpretation or construction of the Plan is required, it shall be interpreted and construed in order to ensure, to the maximum extent permissible by law, that such grantee does not violate the short-swing profit provisions of Section 16(b) of the Exchange Act and that any exemption available under Rule 16b-3 or other rule is available.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2. <u>Administration of the Plan</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) The Plan may be administered by the entire Board or by the Compensation Committee. Once appointed, the Compensation Committee shall continue to serve until otherwise directed by the Board. A majority of the members of the Compensation Committee shall constitute a quorum, and all determinations of the Compensation Committee shall be made by the majority of its members present at a meeting. Any determination of the Compensation Committee under the Plan may be made without notice or meeting of the Compensation Committee by a writing signed by all of the Compensation Committee members. Subject to ratification of the grant of each Stock Right by the Board (but only if so required by applicable state law), and subject to the terms of the Plan, the Compensation Committee shall have the authority to (i) determine the employees of the Company and Related Corporations (from among the class of employees eligible under Section 3 to receive ISOs) to whom ISOs may be granted, and to determine (from among the class of individuals and entities eligible under Section 3 to receive Non-Qualified Options, Restricted Stock, RSUs and SARs) to whom Non-Qualified Options, Restricted Stock, RSUs and SARs may be granted; (ii) determine when Stock Rights may be granted; (iii) determine the exercise prices of Stock Rights (other than Restricted Stock and RSUs), which shall not be less than the Fair Market Value; (iv) determine whether each Option granted shall be an ISO or a Non-Qualified Option; (v) determine when Stock Rights shall become exercisable, the duration of the exercise period and when each Stock Right shall vest; (vi) determine whether restrictions such as repurchase options are to be imposed on shares subject to or issued in connection with Stock Rights, and the nature of such restrictions, if any, and (vii) interpret the Plan and promulgate and rescind rules and regulations relating to it. The interpretation and construction by the Compensation Committee of any provisions of the Plan or of any Stock Right granted under it shall be final, binding and conclusive unless otherwise determined by the Board. The Compensation Committee may from time to time adopt such rules and regulations for carrying out the Plan as it may deem best.

No members of the Compensation Committee or the Board shall be liable for any action or determination made in good faith with respect to the Plan or any Stock Right granted under it. No member of the Compensation Committee or the Board shall be liable for any act or omission of any other member of the Compensation Committee or the Board or for any act or omission on his own part, including but not limited to the exercise of any power and discretion given to him under the Plan, except those resulting from his own gross negligence or willful misconduct.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) The Compensation Committee may select one of its members as its Chairman and shall hold meetings at such time and places as it may determine. All references in this Plan to the Compensation Committee shall mean the Board if no Compensation Committee has been appointed. From time to time the Board may increase the size of the Compensation Committee and appoint additional members thereof, remove members (with or without cause) and appoint new members in substitution therefor, fill vacancies however caused or remove all members of the Compensation Committee and thereafter directly administer the Plan.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) Stock Rights may be granted to members of the Board, whether such grants are in their capacity as directors, Officers or consultants. All grants of Stock Rights to members of the Board shall in all other respects be made in accordance with the provisions of this Plan applicable to other eligible persons. Members of the Board who are either (i) eligible for Stock Rights pursuant to the Plan or (ii) have been granted Stock Rights may vote on any matters affecting the administration of the Plan or the grant of any Stock Rights pursuant to the Plan.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) In addition to such other rights of indemnification as he or she may have as a member of the Board, and with respect to administration of the Plan and the granting of Stock Rights under it, each member of the Board and of the Compensation Committee shall be entitled without further act on his part to indemnification from the Company for all expenses (including advances of litigation expenses, the amount of judgment and the amount of approved settlements made with a view to the curtailment of costs of litigation) reasonably incurred by him in connection with or arising out of any action, suit or proceeding, including any appeal thereof, with respect to the administration of the Plan or the granting of Stock Rights under it in which he may be involved by reason of his being or having been a member of the Board or the Compensation Committee, whether or not he continues to be such member of the Board or the Compensation Committee at the time of the incurring of such expenses; <u>provided</u>, <u>however</u>, that such indemnity shall be subject to the limitations contained in any Indemnification Agreement between the Company and the Board member or Officer. The foregoing right of indemnification shall inure to the benefit of the heirs, executors or administrators of each such member of the Board or the Compensation Committee and shall be in addition to all other rights to which such member of the Board or the Compensation Committee would be entitled to as a matter of law, contract or otherwise.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e) The Board may delegate the powers to grant Stock Rights to Officers to the extent not precluded by the Nevada Revised Statutes.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3. <u>Eligible Employees and Others</u>. ISOs may be granted to any employee of the Company or any Related Corporation of the Company or any Related Corporation. Those Officers and directors of the Company who are not employees, may not be granted ISOs under the Plan. Subject to compliance with Rule 16b-3 and other applicable securities laws, Non-Qualified Options, Restricted Stock, RSUs and SARs may be granted to any director (whether or not an employee), Officer, employee, trust in which an employee who is not a United States citizen is the trustee and/or beneficiary, or consultant of the Company or any Related Corporation. The Compensation Committee may take into consideration a recipient's individual circumstances in determining whether to grant an ISO, a Non-Qualified Option, Restricted Stock, RSUs or an SAR. Granting of any Stock Right to any individual or entity shall neither entitle that individual or entity to, nor disqualify him from participation in, any other grant of Stock Rights.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4. <u>Common Stock</u>. The Common Stock subject to Stock Rights shall be authorized but unissued shares of Common Stock, or shares of Common Stock reacquired by the Company in any manner, including purchase, forfeiture or otherwise. The aggregate number of shares of Common Stock which may be issued pursuant to the Plan shall be no more than 15% of the outstanding shares of Common Stock on a fully diluted basis giving effect to the exercise and conversion of all outstanding Common Stock equivalents issued outside of this Plan including convertible notes, convertible preferred stock and warrants less any Stock Rights previously granted or exercised subject to adjustment as provided below in this Section 4 and in Section 14 (the "Share Reserve"). Any such shares may be issued under ISOs, Non-Qualified Options, Restricted Stock, RSUs or SARs, so long as the number of shares so issued does not exceed the limitations in this Section 4. Subject to adjustment in accordance with Section 14, no more than 375,000 shares of Common Stock may be issued in the aggregate pursuant to the exercise of ISOs. If any Stock Rights granted under the Plan shall expire or terminate for any reason without having been exercised in full or shall cease for any reason to be exercisable in whole or in part, or if the Company shall reacquire any unvested shares, the unpurchased shares subject to such Stock Rights and any unvested shares so reacquired by the Company shall again be available for grants under the Plan. For the avoidance of doubt, in the event that (i) the payment of the exercise price of any Stock Right, or (ii) the satisfaction of any tax withholding obligations arising from any Stock Right is made by withholding of shares of Common Stock by the Company, the shares so withheld shall again become available for grants under the Plan.

The Share Reserve will automatically increase on January 1st of each year (each, an "Increase Date"), for a period of seven years commencing on January 1, 2026 and ending on (and including) January 1, 2032, in an amount equal to 5% of the total number of shares of Common Stock outstanding on December 31 of the preceding calendar year on a fully diluted basis giving effect to the exercise and conversion of all outstanding Common Stock equivalents issued outside of this Plan including convertible notes, convertible preferred stock and warrants less any Stock Rights previously granted or exercised subject to adjustment as provided in Section 14. Notwithstanding the foregoing, the Board may determine, at any time prior to the Increase Date for a given year to provide that there will be no increase in the Share Reserve hereunder for such year, or that the increase in the Share Reserve for such year will be a lesser number of shares of Common Stock than would otherwise occur pursuant to the preceding sentence. For the avoidance of doubt, the Share Reserve in this Section 4 is a limitation on the number of shares of Common Stock that may be issued pursuant to the Plan. Shares may be authorized and issued under the Plan in connection with a merger or acquisition as permitted by the Rules of The Nasdaq Stock Market LLC or the rules of another applicable principal market without the need for shareholder approval (to the extent so provided in the applicable principal market rule(s)), in which case such authorization or issuance will not reduce the number of shares of Common Stock available for grant or issuance under the Plan.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5. <u>Granting of Stock Rights</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) The date of grant of a Stock Right under the Plan will be the date specified by the Board or Compensation Committee at the time it grants the Stock Right; <u>provided</u>, <u>however</u>, that such date shall not be prior to the date on which the Board or Compensation Committee acts to approve the grant. The Board or Compensation Committee shall have the right, with the consent of the optionee, to convert an ISO granted under the Plan to a Non-Qualified Option pursuant to Section 17.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) The Board or Compensation Committee shall grant Stock Rights to participants that it, in its sole discretion, selects. Stock Rights shall be granted on such terms as the Board or Compensation Committee shall determine except that ISOs shall be granted on terms that comply with the Code and regulations thereunder.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) A SAR entitles the holder to receive, as designated by the Board or Compensation Committee, cash or shares of Common Stock, value equal to (or otherwise based on) the excess of: (a) the Fair Market Value of a specified number of shares of Common Stock at the time of exercise over (b) an exercise price established by the Board or Compensation Committee. The exercise price of each SAR granted under this Plan shall be established by the Compensation Committee or shall be determined by a method established by the Board or Compensation Committee at the time the SAR is granted, provided the exercise price shall not be less than 100% of the Fair Market Value of a share of Common Stock on the date of the grant of the SAR, or such higher price as is established by the Board or Compensation Committee. A SAR shall be exercisable in accordance with such terms and conditions and during such periods as may be established by the Board or Compensation Committee. Shares of Common Stock delivered pursuant to the exercise of a SAR shall be subject to such conditions, restrictions and contingencies as the Board or Compensation Committee may establish in the applicable SAR agreement or document, if any. The Board or Compensation Committee, in its discretion, may impose such conditions, restrictions and contingencies with respect to shares of Common Stock acquired pursuant to the exercise of each SAR as the Board or Compensation Committee determines to be desirable. A SAR under the Plan shall be subject to such terms and conditions, not inconsistent with the Plan, as the Board or Compensation Committee shall, in its discretion, prescribe. The terms and conditions of any SAR to any grantee shall be reflected in such form of agreement as is determined by the Board or Compensation Committee. A copy of such document, if any, shall be provided to the grantee, and the Board or Compensation Committee may condition the granting of the SAR on the grantee executing such agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) An RSU gives the grantee the right to receive a number of shares of the Company's Common Stock on applicable vesting or other dates. Delivery of the RSUs may be deferred beyond vesting as determined by the Board or Compensation Committee. RSUs shall be evidenced by an RSU agreement in the form determined by the Board or Compensation Committee. With respect to an RSU, which becomes non-forfeitable due to the lapse of time, the Compensation Committee shall prescribe in the RSU agreement the vesting period. With respect to the granting of the RSU, which becomes non-forfeitable due to the satisfaction of certain pre-established performance-based objectives imposed by the Board or Compensation Committee, the measurement date of whether such performance-based objectives have been satisfied shall be a date no earlier than the first anniversary of the date of the RSU. A recipient who is granted an RSU shall possess no incidents of ownership with respect to such underlying Common Stock, although the RSU agreement may provide for payments in lieu of dividends to such grantee.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e) Notwithstanding any provision of this Plan, the Board or Compensation Committee may impose conditions and restrictions on any grant of Stock Rights including forfeiture of vested Options, cancellation of Common Stock acquired in connection with any Stock Right and forfeiture of profits.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(f) The Options and SARs shall not be exercisable for a period of more than 10 years from the date of grant.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6. <u>Sale of Shares</u>. The shares underlying Stock Rights granted to any Officer, director or a beneficial owner of 10% or more of the Company's securities registered under Section 12 of the Exchange Act shall not be sold, assigned or transferred by the grantee until at least six months elapse from the date of the grant thereof.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;7. <u>ISO Minimum Option Price and Other Limitations</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) The exercise price per share relating to all Options granted under the Plan shall not be less than the Fair Market Value per share of Common Stock on the last trading day prior to the date of such grant. For purposes of determining the exercise price, the date of the grant shall be the later of (i) the date of approval by the Board or Compensation Committee or the Board, or (ii) for ISOs, the date the recipient becomes an employee of the Company. In the case of an ISO to be granted to an employee owning Common Stock which represents more than 10% of the total combined voting power of all classes of stock of the Company or any Related Corporation, the price per share shall not be less than 110% of the Fair Market Value per share of Common Stock on the date of grant and such ISO shall not be exercisable after the expiration of five years from the date of grant.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) In no event shall the aggregate Fair Market Value (determined at the time an ISO is granted) of Common Stock for which ISOs granted to any employee are exercisable for the first time by such employee during any calendar year (under all stock option plans of the Company and any Related Corporation) exceed $100,000.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;8. <u>Duration of Stock Rights</u>. Subject to earlier termination as provided in Sections 5, 9, 10 and 11, each Option and SAR shall expire on the date specified in the original instrument granting such Stock Right (except with respect to any part of an ISO that is converted into a Non-Qualified Option pursuant to Section 17), <u>provided</u>, <u>however</u>, that such instrument must comply with Section 422 of the Code with regard to ISOs and Rule 16b-3 with regard to all Stock Rights granted pursuant to the Plan to Officers, directors and 10% shareholders of the Company.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;9. <u>Exercise of Options and SARs; Vesting of Stock Rights</u>. Subject to the provisions of Sections 9 through 13, each Option and SAR granted under the Plan shall be exercisable as follows:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) The Options and SARs shall either be fully vested and exercisable from the date of grant or shall vest and become exercisable in such installments as the Board or Compensation Committee may specify.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) Once an installment becomes exercisable it shall remain exercisable until expiration or termination of the Option and SAR, unless otherwise specified by the Board or Compensation Committee.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) Each Option and SAR or installment, once it becomes exercisable, may be exercised at any time or from time to time, in whole or in part, for up to the total number of shares with respect to which it is then exercisable.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) The Board or Compensation Committee shall have the right to accelerate the vesting date of any installment of any Stock Right; <u>provided</u> that the Board or Compensation Committee shall not accelerate the exercise date of any installment of any Option granted to any employee as an ISO (and not previously converted into a Non-Qualified Option pursuant to Section 17) if such acceleration would violate the annual exercisability limitation contained in Section 422(d) of the Code as described in Section 7(b).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;10. <u>Termination of Employment</u>. Subject to any greater restrictions or limitations as may be imposed by the Board or Compensation Committee or by a written agreement, if an optionee ceases to be employed by the Company and all Related Corporations other than by reason of death or Disability, no further installments of his Options shall vest or become exercisable, and his Options shall terminate as provided for in the grant or on the day 12 months after the day of the termination of his employment (except three months for ISOs), whichever is earlier, but in no event later than on their specified expiration dates. Employment shall be considered as continuing uninterrupted during any bona fide leave of absence (such as those attributable to illness, military obligations or governmental service) provided that the period of such leave does not exceed 90 days or, if longer, any period during which such optionee's right to re-employment is guaranteed by statute. A leave of absence with the written approval of the Board shall not be considered an interruption of employment under the Plan, provided that such written approval contractually obligates the Company or any Related Corporation to continue the employment of the optionee after the approved period of absence. ISOs granted under the Plan shall not be affected by any change of employment within or among the Company and Related Corporations so long as the optionee continues to be an employee of the Company or any Related Corporation.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;11. <u>Death; Disability</u>. Unless otherwise determined by the Board or Compensation Committee or by a written agreement:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) If the holder of an Option or SAR ceases to be employed by the Company and all Related Corporations by reason of his death, any Options or SARs held by the optionee may be exercised to the extent he could have exercised it on the date of his death, by his estate, personal representative or beneficiary who has acquired the Options or SARs by will or by the laws of descent and distribution, at any time prior to the earlier of: (i) the Options' or SARs' specified expiration date or (ii) one year (except three months for an ISO) from the date of death.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) If the holder of an Option or SAR ceases to be employed by the Company and all Related Corporations, or a director or Director Advisor can no longer perform his duties, by reason of his Disability, any Options or SARs held by the optionee may be exercised to the extent he could have exercised it on the date of termination due to Disability until the earlier of (i) the Options' or SARs' specified expiration date or (ii) one year from the date of the termination.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;12. <u>Assignment, Transfer or Sale</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) No ISO granted under this Plan shall be assignable or transferable by the grantee except by will or by the laws of descent and distribution, and during the lifetime of the grantee, each ISO shall be exercisable only by him, his guardian or legal representative.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) Except for ISOs, all Stock Rights are transferable subject to compliance with applicable securities laws and Section 6 of this Plan.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;13. <u>Terms and Conditions of Stock Rights</u>. Stock Rights shall be evidenced by instruments (which need not be identical) in such forms as the Board or Compensation Committee may from time to time approve. Such instruments shall conform to the terms and conditions set forth in Sections 5 through 12 hereof and may contain such other provisions as the Board or Compensation Committee deems advisable which are not inconsistent with the Plan. In granting any Stock Rights, the Board or Compensation Committee may specify that Stock Rights shall be subject to the restrictions set forth herein with respect to ISOs, or to such other termination and cancellation provisions as the Board or Compensation Committee may determine. The Board or Compensation Committee may from time to time confer authority and responsibility on one or more of its own members and/or one or more Officers of the Company to execute and deliver such instruments. The proper Officers of the Company are authorized and directed to take any and all action necessary or advisable from time to time to carry out the terms of such instruments.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;14. <u>Adjustments Upon Certain Events</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) Subject to any required action by the shareholders of the Company, the number of shares of Common Stock covered by each outstanding Stock Right, and the number of shares of Common Stock which have been authorized for issuance under the Plan but as to which no Stock Rights have yet been granted or which have been returned to the Plan upon cancellation or expiration of a Stock Right, as well as the price per share of Common Stock (or cash, as applicable) covered by each such outstanding Option or SAR, shall be proportionately adjusted for any increases or decrease in the number of issued shares of Common Stock resulting from a stock split, reverse stock split, stock dividend, combination or reclassification of Common Stock, or any other increase or decrease in the number of issued shares of Common Stock effected without receipt of consideration by the Company; <u>provided</u>, <u>however</u>, that conversion of any convertible securities of the Company or the voluntary cancellation whether by virtue of a cashless exercise of a derivative security of the Company (including any alternative cashless exercise) or otherwise shall not be deemed to have been "effected without receipt of consideration." Such adjustment shall be made by the Board or Compensation Committee, whose determination in that respect shall be final, binding and conclusive. Except as expressly provided herein, no issuance by the Company of shares of stock of any class, or securities convertible into shares of stock of any class, shall affect, and no adjustment by reason thereof shall be made with respect to, the number or price of shares of Common Stock subject to a Stock Right. No adjustments shall be made for dividends or other distributions paid in cash or in property other than securities of the Company.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) In the event of the proposed dissolution or liquidation of the Company, the Board or Compensation Committee shall notify each participant as soon as practicable prior to the effective date of such proposed transaction. To the extent it has not been previously exercised, a Stock Right will terminate immediately prior to the consummation of such proposed action.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) In the event of a merger of the Company with or into another corporation, or a Change of Control, each outstanding Stock Right shall be assumed (as defined below) or an equivalent option or right substituted by the successor corporation or a parent or subsidiary of the successor corporation. In the event that the successor corporation refuses to assume or substitute for the Stock Rights, the participants shall fully vest in and have the right to exercise their Stock Rights as to which it would not otherwise be vested or exercisable. If a Stock Right becomes fully vested and exercisable in lieu of assumption or substitution in the event of a merger or sale of assets, the Board or Compensation Committee shall notify the participant in writing or electronically that the Stock Right shall be fully vested and exercisable for a period of at least 15 days from the date of such notice, and any Options or SARs shall terminate one minute prior to the closing of the merger or sale of assets.

For the purposes of this Section 14(c), the Stock Right shall be considered "assumed" if, following the merger or Change of Control, the option or right confers the right to purchase or receive, for each share of Common Stock subject to the Stock Right immediately prior to the merger or Change of Control, the consideration (whether stock, cash, or other securities or property) received in the merger or Change of Control by holders of Common Stock for each share held on the effective date of the transaction (and if holders were offered a choice of consideration, the type of consideration chosen by the holders of a majority of the outstanding Shares); <u>provided</u>, <u>however</u>, that if such consideration received in the merger or Change of Control is not solely common stock of the successor corporation or its parent, the Board or Compensation Committee may, with the consent of the successor corporation, provide for the consideration to be received upon the exercise of the Stock Right, for each share of Common Stock subject to the Stock Right, to be solely common stock of the successor corporation or its parent equal in Fair Market Value to the per share consideration received by holders of Common Stock in the merger or Change of Control.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) Notwithstanding the foregoing, any adjustments made pursuant to Section 14(a), (b) or (c) with respect to ISOs shall be made only after the Board or Compensation Committee, after consulting with counsel for the Company, determines whether such adjustments would constitute a "modification" of such ISOs (as that term is defined in Section 424(h) of the Code) or would cause any adverse tax consequences for the holders of such ISOs. If the Board or Compensation Committee determines that such adjustments made with respect to ISOs would constitute a modification of such ISOs it may refrain from making such adjustments.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e) No fractional shares shall be issued under the Plan and the optionee or cash settled SAR holder shall receive from the Company cash in lieu of such fractional shares.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;15. <u>Means of Exercising Stock Rights</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) An Option or SAR (or any part or installment thereof) shall be exercised by giving written notice to the Company at its principal office address. Such notice shall identify the Stock Right being exercised and specify the number of shares as to which such Stock Right is being exercised, accompanied by full payment of the exercise price therefor (to the extent it is exercisable in cash) either (i) in United States dollars by check or wire transfer; or (ii) at the discretion of the Board or Compensation Committee, through delivery of shares of Common Stock having a Fair Market Value equal as of the date of the exercise to the cash exercise price of the Stock Right or such other formula as may be approved by the Board or Compensation Committee; or (iii) at the discretion of the Board or Compensation Committee, by any combination of (i) and (ii) above. If the Board or Compensation Committee exercises its discretion to permit payment of the exercise price of an ISO by means of the methods set forth in clauses (ii) or (iii) of the preceding sentence, such discretion need not be exercised in writing at the time of the grant of the Stock Right in question. The holder of a Stock Right shall not have the rights of a shareholder with respect to the shares covered by his Stock Right until the date of issuance of a stock certificate to him for such shares. Except as expressly provided above in Section 14 with respect to changes in capitalization and stock dividends, no adjustment shall be made for dividends or similar rights for which the record date is before the date such stock certificate is issued.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) Each notice of exercise shall, unless the shares of Common Stock are covered by a then current registration statement under the Securities Act, contain the holder's acknowledgment in form and substance satisfactory to the Company that (i) such shares are being purchased for investment and not for distribution or resale (other than a distribution or resale which, in the opinion of counsel satisfactory to the Company, may be made without violating the registration provisions of the Securities Act), (ii) the holder has been advised and understands that (1) the shares have not been registered under the Securities Act and are "restricted securities" within the meaning of Rule 144 under the Securities Act and are subject to restrictions on transfer and (2) the Company is under no obligation to register the shares under the Securities Act or to take any action which would make available to the holder any exemption from such registration, and (iii) such shares may not be transferred without compliance with all applicable federal and state securities laws. Notwithstanding the above, should the Company be advised by counsel that issuance of shares should be delayed pending registration under federal or state securities laws or the receipt of an opinion that an appropriate exemption therefrom is available, the Company may defer exercise of any Stock Right granted hereunder until either such event has occurred.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;16. <u>Term, Termination and Amendment</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) This Plan was adopted by the Board. This Plan shall be approved by the Company's shareholders, which approval is required for ISOs within 12 months of the date on which the Plan was adopted by the Board.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) The Board may terminate the Plan at any time. Unless sooner terminated, the Plan shall terminate 10 years from the date the Board adopts the Plan. No Stock Rights may be granted under the Plan once the Plan is terminated. Termination of the Plan shall not impair rights and obligations under any Stock Right granted while the Plan is in effect, except with the written consent of the grantee.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) The Board at any time, and from time to time, may amend the Plan. <u>Provided</u>, <u>however</u>, except as provided in Section 14 relating to adjustments in Common Stock, no amendment shall be effective unless approved by the shareholders of the Company to the extent (i) shareholder approval is necessary to satisfy the requirements of Section 422 of the Code or (ii) required by the rules of the principal national securities exchange or trading market upon which the Company's Common Stock trades. Rights under any Stock Rights granted before amendment of the Plan shall not be impaired by any amendment of the Plan, except with the written consent of the grantee.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) The Board at any time, and from time to time, may amend the terms of any one or more Stock Rights; <u>provided</u>, <u>however</u>, that the rights under the Stock Right shall not be impaired by any such amendment, except with the written consent of the grantee.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;17. <u>Conversion of ISOs into Non-Qualified Options; Termination of ISOs</u>. The Board or Compensation Committee, at the written request of any optionee, may in its discretion take such actions as may be necessary to convert such optionee's ISOs (or any installments or portions of installments thereof) that have not been exercised on the date of conversion into Non-Qualified Options at any time prior to the expiration of such ISOs, regardless of whether the optionee is an employee of the Company or a Related Corporation at the time of such conversion. <u>Provided</u>, <u>however</u>, the Board or Compensation Committee shall not reprice the Options or extend the exercise period or reduce the exercise price of the appropriate installments of such Options without the approval of the Company's shareholders. At the time of such conversion, the Board or Compensation Committee (with the consent of the optionee) may impose such conditions on the exercise of the resulting Non-Qualified Options as the Board or Compensation Committee in its discretion may determine, provided that such conditions shall not be inconsistent with this Plan. Nothing in the Plan shall be deemed to give any optionee the right to have such optionee's ISOs converted into Non-Qualified Options, and no such conversion shall occur until and unless the Board or Compensation Committee takes appropriate action. The Compensation Committee, with the consent of the optionee, may also terminate any portion of any ISO that has not been exercised at the time of such termination.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;18. <u>Application of Funds</u>. The proceeds received by the Company from the sale of shares pursuant to Options or SARS (if cash settled) granted under the Plan shall be used for general corporate purposes.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;19. <u>Governmental Regulations</u>. The Company's obligation to sell and deliver shares of the Common Stock under this Plan is subject to the approval of any governmental authority required in connection with the authorization, issuance or sale of such shares.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;20. <u>Withholding of Additional Income Taxes</u>. In connection with the granting, exercise or vesting of a Stock Right or the making of a Disqualifying Disposition the Company, in accordance with Section 3402(a) of the Code, may require the optionee to pay additional withholding taxes in respect of the amount that is considered compensation includable in such person's gross income.

To the extent that the Company is required to withhold taxes for federal income tax purposes as provided above, if any optionee may elect to satisfy such withholding requirement by (i) paying the amount of the required withholding tax to the Company; (ii) delivering to the Company shares of its Common Stock (including shares of Restricted Stock) previously owned by the optionee; or (iii) having the Company retain a portion of the shares covered by an Option exercise. The number of shares to be delivered to or withheld by the Company times the Fair Market Value of such shares or such other formula as may be approved by the Board or Compensation Committee pursuant to the Plan shall equal the cash required to be withheld.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;21. Notice to the Company of Disqualifying Disposition. Each employee who receives an ISO must agree to notify the Company in writing immediately after the employee makes a Disqualifying Disposition of any Common Stock acquired pursuant to the exercise of an ISO. If the employee has died before such stock is sold, the holding periods requirements of the Disqualifying Disposition do not apply and no Disqualifying Disposition can occur thereafter.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;22. <u>Continued Employment</u>. The grant of a Stock Right pursuant to the Plan shall not be construed to imply or to constitute evidence of any agreement, express or implied, on the part of the Company or any Related Corporation to retain the grantee in the employ of the Company or a Related Corporation, as a member of the Company's Board or in any other capacity, whichever the case may be.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;23. <u>Governing Law; Construction</u>. The validity and construction of the Plan and the instruments evidencing Stock Rights shall be governed by the laws of the State of Nevada. In construing this Plan, the singular shall include the plural and the masculine gender shall include the feminine and neuter, unless the context otherwise requires.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;24. (a) <u>Forfeiture of Stock Rights Granted to Employees or Consultants</u>. Notwithstanding any other provision of this Plan, and unless otherwise provided for in a Stock Rights Agreement, all vested or unvested Stock Rights granted to employees or consultants shall be immediately forfeited at the discretion of the Board if any of the following events occur:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1) Termination of the relationship with the grantee for cause including, but not limited to, fraud, theft, dishonesty and violation of Company policy;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(2) Purchasing or selling securities of the Company in violation of the Company's insider trading guidelines then in effect;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(3) Breaching any duty of confidentiality including that required by the Company's insider trading guidelines then in effect;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(4) Competing with the Company;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(5) Being unavailable for consultation after leaving the Company's employment if such availability is a condition of any agreement between the Company and the grantee;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(6) Recruitment of Company personnel after termination of employment, whether such termination is voluntary or for cause;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(7) Failure to assign any invention or technology to the Company if such assignment is a condition of employment or any other agreements between the Company and the grantee; or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(8) A finding by the Board that the grantee has acted disloyally and/or against the interests of the Company.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) <u>Forfeiture of Stock Rights Granted to Directors</u>. Notwithstanding any other provision of this Plan, and unless otherwise provided for in a Stock Rights Agreement, all vested or unvested Stock Rights granted to directors shall be immediately forfeited at the discretion of the Board if any of the following events occur:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1) Purchasing or selling securities of the Company in violation of the Company's insider trading guidelines then in effect;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(2) Breaching any duty of confidentiality including that required by the Company's insider trading guidelines then in effect;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(3) Competing with the Company;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(4) Recruitment of Company personnel after ceasing to be a director;

or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(5) A finding by the Board that the grantee has acted disloyally and/or against the interests of the Company.

The Company may impose other forfeiture restrictions which are more or less restrictive and require a return of profits from the sale of Common Stock as part of said forfeiture provisions if such forfeiture provisions and/or return of provisions are contained in a Stock Rights Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) <u>Profits on the Sale of Certain Shares; Redemption</u>. If any of the events specified in Section 24(a) or (b) of the Plan occur within one year from the date the grantee last performed services for the Company in the capacity for which the Stock Rights were granted (the "Termination Date") (or such longer period required by any written agreement), all profits earned from the sale of the Company's securities, including the sale of shares of Common Stock underlying the Stock Rights, during the two-year period commencing one year prior to the Termination Date shall be forfeited and immediately paid by the grantee to the Company. Further, in such event, the Company may at its option redeem shares of Common Stock acquired upon exercise of the Stock Right by payment of the exercise price to the grantee. To the extent that another written agreement with the Company extends the events in Section 24(a) or (b) beyond one year following the Termination Date, the two-year period shall be extended by an equal number of days. The Company's rights under this Section 24(c) do not lapse one year form the Termination Date but are contract rights subject to any appropriate statutory limitation period.

## Exhibit 31.1

**Exhibit 31.1**

**CERTIFICATION OF CHIEF EXECUTIVE OFFICER** 

**PURSUANT TO RULES 13a-14(a) AND 15d-14(a) UNDER THE SECURITIES EXCHANGE ACT OF 1934**

I, Nicholas R. Liuzza, Jr., certify that:

1. I have reviewed this Quarterly Report on Form 10-Q of Beeline Holdings, Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and

5. The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

Date: November 14, 2025

---

| |
|:---|
| */s/ Nicholas R. Liuzza, Jr.* |
| Nicholas R. Liuzza, Jr. |
| Chief Executive Officer |

---

## Exhibit 31.2

**Exhibit 31.2**

**CERTIFICATION OF CHIEF FINANCIAL OFFICER**

**PURSUANT TO RULES 13a-14(a) AND 15d-14(a) UNDER THE SECURITIES EXCHANGE ACT OF 1934**

I, Christopher R. Moe, certify that:

1. I have reviewed this Quarterly Report on Form 10-Q of Beeline Holdings, Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and

5. The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

Date: November 14, 2025

---

| |
|:---|
| */s/ Christopher R. Moe* |
| Christopher R. Moe |
| Chief Financial Officer |

---

## Exhibit 32.1

**Exhibit 32.1**

**CERTIFICATION OF CHIEF EXECUTIVE OFFICER**

**PURSUANT TO 18 U.S.C. SECTION 1350**

I, Nicholas R. Liuzza, Jr., Chief Executive Officer, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that the Quarterly Report of Beeline Holdings, Inc. on Form 10-Q for the period ended September 30, 2025 fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934 and that information contained in such Quarterly Report on Form 10-Q fairly presents, in all material respects, the financial condition and results of operations of Beeline Holdings, Inc.

Date: November 14, 2025

---

| | |
|:---|:---|
| By*:* | */s/ Nicholas R. Liuzza, Jr.* |
| Name: | Nicholas R. Liuzza, Jr. |
| Title: | Chief Executive Officer |

---

## Exhibit 32.2

**Exhibit 32.2**

**CERTIFICATION OF CHIEF FINANCIAL OFFICER**

**PURSUANT TO 18 U.S.C. SECTION 1350**

I, Christopher R. Moe, Chief Financial Officer, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that the Quarterly Report of Beeline Holdings, Inc. on Form 10-Q for the period ended September 30, 2025 fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934 and that information contained in such Quarterly Report on Form 10-Q fairly presents, in all material respects, the financial condition and results of operations of Beeline Holdings, Inc.

Date: November 14, 2025

---

| | |
|:---|:---|
| By*:* | */s/ Christopher R. Moe* |
| Name: | Christopher R. Moe |
| Title: | Chief Financial Officer |

---