Beeline Holdings issues 12-month going-concern warning
Sentiment and the balance of points
Rhea-AI Sentiment reads the wording of the document, how positive or negative its language is on a 1 to 5 scale. The balance of points shown with the takes weighs what the document actually discloses, so the two can disagree, for example when a trial that missed its main goal is described in upbeat language.
Rhea-AI Filing Summary
Beeline Holdings, Inc. (BLNE) reported third-quarter 2026 total net revenue of $3.014 million, versus $2.327 million a year earlier; nine-month revenue was $8.335 million, versus $5.251 million. Quarterly loss from continuing operations was $3.810 million, compared with $3.601 million, while the nine-month loss was $13.122 million, compared with $14.310 million. Cash and cash equivalents were $2.070 million at September 30, 2026.
Beeline said recurring losses and negative operating cash flows since inception, and dependence on debt or equity financing, raise substantial doubt about its ability to continue as a going concern for the 12 months following issuance. Management said it needs to raise debt and/or equity to meet its plan. On June 30, 2026, the company acquired MagicBlocks’ remaining 52.4% interest for a stated $0.6 million purchase price, including 211,679 common shares valued at $1.22 each.
On July 28, 2026, Beeline entered a non-binding letter of intent with related party TYTL Corp. for a proposed all-stock merger, subject to negotiation of definitive agreements. If completed, the parties intend to combine digital mortgage, lending and title services with TYTL’s blockchain-based real-estate platform.
How this balance works
Rhea-AI gives every point it takes from this document a weight. Minor counts 1, Moderate 3 and Major 9, so one Major point outweighs several Minor ones. The bar adds up the weights on each side, and when neither side holds more than 65% of the total the balance reads Mixed.
It reads the document as published, with the same rules for every company, and it does not look at what the market expected or at how the stock traded, so a point can be objectively good on a day the stock falls.
Rhea-AI Sentiment measures something else, the tone of the wording.
Positive
- Moderate pointQuarterly revenue increased to $3.014 million from $2.327 million.
- Moderate pointNine-month continuing-operations loss declined to $13.122 million from $14.310 million.
- Minor pointNine-month revenue increased to $8.335 million from $5.251 million.
Negative
- Major pointGoing-concern disclosure cites substantial doubt for 12 months following issuance.
- Minor pointQuarterly continuing-operations loss increased to $3.810 million from $3.601 million.
Filing Explained
Beeline issued common shares for cash through equity-line and at-the-market sales, as well as for services, an acquisition and conversions; outstanding shares were 27,904,433 on
Key Figures
Key Terms
going concern financial
step-acquisition financial
fair value option financial
pull-through factor financial
Level 3 financial
Non-QM mortgage products financial
FAQ
AI-generated questions and answers. How Rhea-AI works. Not financial advice.
What revenue did BLNE report for Q3 2026?
What was BLNE’s loss from continuing operations?
What is the status of BLNE’s proposed TYTL merger?
AI-generated analysis. How Rhea-AI works. Not financial advice.
U. S. SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM
| QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For
the quarterly period ended
| 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
(Name of small business issuer as specified in its charter)
(State or other jurisdiction of incorporation or organization) |
(I.R.S. Employer Identification No.) |
(Address of principal executive offices, including zip code)
Registrant’s
telephone number, including area code:
Securities registered pursuant to Section 12(b) of the Act:
| The
| ||||
| (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.
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).
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 ☐ |
| 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 12, 2026, shares of our common stock were outstanding.
Documents Incorporated by Reference: None.
BEELINE HOLDINGS, INC.
FORM 10-Q
September 30, 2026
TABLE OF CONTENTS
| Page | ||
| PART I— FINANCIAL INFORMATION | 3 | |
| Item 1. | Financial Statements | 3 |
| Consolidated Balance Sheets as of September 30, 2026 (unaudited) and December 31, 2025 | 3 | |
| Consolidated Statements of Operations and Comprehensive Loss for the Three and Nine Months Ended September 30, 2026 and 2025 (unaudited) | 4 | |
| Consolidated Statements of Changes in Equity for the Three and Nine Months Ended September 30, 2026 and 2025 (unaudited) | 5 | |
| Consolidated Statements of Cash Flows for the Nine Months Ended September 30, 2026 and 2025 (unaudited) | 6 | |
| Notes to the Consolidated Financial Statements (unaudited) | 7 | |
| Item 2. | Management’s Discussion and Analysis of Financial Condition and Results of Operations | 39 |
| Item 3. | Quantitative and Qualitative Disclosures About Market Risk | 51 |
| Item 4 | Controls and Procedures | 51 |
| PART II— OTHER INFORMATION | 51 | |
| Item 1 | Legal Proceedings | 51 |
| Item 1A | Risk Factors | 52 |
| Item 2. | Unregistered Sales of Equity Securities and Use of Proceeds | 52 |
| Item 3. | Defaults Upon Senior Securities | 52 |
| Item 4. | Mine Safety Disclosures | 52 |
| Item 5. | Other Information | 52 |
| Item 6. | Exhibits | 52 |
| SIGNATURES | 55 | |
| 2 |
PART I: FINANCIAL INFORMATION
ITEM 1 – FINANCIAL STATEMENTS
Beeline Holdings, Inc. and Subsidiaries
Consolidated Balance Sheets
September 30, 2026 and December 31, 2025
(Dollars in thousands, except share and per share amounts)
| 2026 | 2025 | |||||||
| (Unaudited) | ||||||||
| Assets | ||||||||
| Current assets: | ||||||||
| Cash and cash equivalents | $ | $ | ||||||
| Current portion of restricted cash | ||||||||
| Mortgage loans held for sale, net, at fair value | ||||||||
| Interest rate lock commitment derivative | ||||||||
| Accounts receivable, net (includes related party receivables of $ | ||||||||
| Other receivable | ||||||||
| Prepaid expenses and other current assets | ||||||||
| Due from affiliate | ||||||||
| Total current assets | ||||||||
| Goodwill | ||||||||
| Property and equipment, net | ||||||||
| Intangible assets, net | ||||||||
| Right-of-use assets | ||||||||
| Restricted cash | ||||||||
| Simple Agreements for Future Equity (“SAFEs”), related party | ||||||||
| Other assets, net | ||||||||
| Total Assets | $ | $ | ||||||
| Liabilities and Shareholders’ Equity | ||||||||
| Current liabilities: | ||||||||
| Warehouse lines of credit and accrued interest | $ | $ | ||||||
| Loans committed for funding | ||||||||
| Accounts payable | ||||||||
| Accrued liabilities | ||||||||
| Current portion of note payable and accrued interest, net of original issue discount | ||||||||
| Current portion of lease liabilities | ||||||||
| Total current liabilities | ||||||||
| Lease liabilities, net of current portion | ||||||||
| Other noncurrent liabilities | ||||||||
| Total liabilities | ||||||||
| Commitments and contingencies (Note 16) | ||||||||
| Shareholders’ Equity: | ||||||||
| Common stock, $ par value; shares authorized and and shares issued and outstanding as of September 30, 2026 and December 31, 2025, respectively | ||||||||
| Preferred stock, $ par value, authorized | ||||||||
| Preferred stock Series A; shares designated; shares and shares issued and outstanding as of September 30, 2026 and December 31, 2025, respectively | ||||||||
| Preferred stock Series B; shares designated; shares issued and outstanding as of September 30, 2026 and December 31, 2025 | ||||||||
| Preferred stock Series F; shares designated; shares and shares issued and outstanding as of September 30, 2026 and December 31, 2025, respectively | ||||||||
| Preferred stock Series F-1; shares designated; shares and shares issued and outstanding as of September 30, 2026 and December 31, 2025, respectively | ||||||||
| Preferred stock Series G; shares designated; shares and shares issued and outstanding as of September 30, 2026 and December 31, 2025, respectively | ||||||||
| Additional paid-in capital | ||||||||
| Accumulated other comprehensive loss | ( | ) | ( | ) | ||||
| Accumulated deficit | ( | ) | ( | ) | ||||
| Total Shareholders’ Equity | ||||||||
| Total Liabilities and Shareholders’ Equity | $ | $ | ||||||
The accompanying notes are an integral part of these unaudited consolidated financial statements.
| 3 |
Beeline Holdings, Inc. and Subsidiaries
Consolidated Statements of Operations and Comprehensive Loss
Three and Nine Months Ended September 30, 2026 and 2025
(Dollars in thousands, except share and per share amounts)
(Unaudited)
| Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||
| 2026 | 2025 | 2026 | 2025 | |||||||||||||
| Revenues | ||||||||||||||||
| Gain on sale of loans, net | $ | $ | $ | $ | ||||||||||||
| Loan origination fees | ||||||||||||||||
| Interest income (expense) | ||||||||||||||||
| Interest income | ||||||||||||||||
| Interest expense | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| Interest income (expense), net | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| Title fees (includes related party fees of $ | ||||||||||||||||
| Fractional equity revenues, related party | ||||||||||||||||
| Other revenues (includes related party fees of $ | ||||||||||||||||
| Total net revenues | ||||||||||||||||
| Operating Expenses | ||||||||||||||||
| Compensation, commissions and benefits | ||||||||||||||||
| General and administrative expenses | ||||||||||||||||
| Depreciation and amortization | ||||||||||||||||
| Marketing and advertising | ||||||||||||||||
| Other operating expenses | ||||||||||||||||
| Total operating expenses | ||||||||||||||||
| Loss from operations | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| Other income (expense), net | ||||||||||||||||
| Interest income | ||||||||||||||||
| Interest expense | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| Gain (loss) on extinguishment of debt | ( | ) | ( | ) | ||||||||||||
| Change in equity method investment | ( | ) | ||||||||||||||
| Gain on remeasurement of previously held equity interest | ||||||||||||||||
| Other income, net | ||||||||||||||||
| Total other income (expense), net | ( | ) | ( | ) | ( | ) | ||||||||||
| Loss before income taxes | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| Provision for income taxes | ||||||||||||||||
| Net loss from continuing operations | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| Income from discontinued operations | ||||||||||||||||
| Loss from disposal of discontinued operations | ( | ) | ( | ) | ||||||||||||
| Net loss from discontinued operations | ( | ) | ( | ) | ||||||||||||
| Net loss | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| Net loss attributable to non-controlling interests (related to discontinued operations) | ( | ) | ( | ) | ||||||||||||
| Net loss attributable to common stockholders before preferred stock dividends | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| Preferred stock dividends | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| Deemed dividend - Preferred stock Series G and warrant price protection | ( | ) | ||||||||||||||
| Net loss attributable to common stockholders | $ | ( | ) | $ | ( | ) | $ | ( | ) | $ | ( | ) | ||||
| Comprehensive loss | ||||||||||||||||
| Net loss | $ | ( | ) | $ | ( | ) | $ | ( | ) | $ | ( | ) | ||||
| Unrealized foreign currency translation gain (loss) | ( | ) | ( | ) | ||||||||||||
| Total comprehensive loss | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| Comprehensive loss attributable to non-controlling interests (related to discontinued operations) | ( | ) | ( | ) | ||||||||||||
| Comprehensive loss attributable to common stockholders | $ | ( | ) | $ | ( | ) | $ | ( | ) | $ | ( | ) | ||||
| Basic and diluted net loss from continuing operations per common share | $ | ) | $ | ) | $ | ) | $ | ) | ||||||||
| Basic and diluted net loss from discontinued operations per common share | $ | $ | ) | $ | $ | ) | ||||||||||
| Basic and diluted net loss per common share available to common stockholders | $ | ) | $ | ) | $ | ) | $ | ) | ||||||||
| Basic and diluted weighted average common shares outstanding | ||||||||||||||||
The accompanying notes are an integral part of these unaudited consolidated financial statements.
| 4 |
Beeline Holdings, Inc. and Subsidiaries
Consolidated Statements of Changes in Equity
For the Three and Nine Months Ended September 30, 2026 and 2025
(Dollars in thousands, except share amounts)
(Unaudited)
| Common Stock | Series
A Preferred Stock | Series
B Preferred Stock | Series
D Preferred Stock | Series
E Preferred Stock | Series
F Preferred Stock | Series
F1 Preferred Stock | Series
G Preferred Stock | Stock to be | Additional Paid-in | Accumulated | Accumulated Other Comprehensive | Non-Controlling | Total | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Shares | Amount | Shares | Amount | Shares | Amount | Shares | Amount | Shares | Amount | Shares | Amount | Shares | Amount | Shares | Amount | Issued | Capital | Deficit | Loss | Interest | Equity | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Balance, December 31, 2024 | $ | $ | $ | $ | $ | $ | $ | $ | $ | $ | $ | ( | ) | $ | ( | ) | $ | $ | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Issuance of common stock to third parties for services | - | - | - | - | - | - | - | ( | ) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Issuance of stock related to settlement | - | - | - | - | - | - | - | ( | ) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Issuance of common stock to employees for services | - | - | - | - | - | - | - | - | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Conversion of preferred shares | - | - | - | - | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Series G Preferred Stock issued for cash, net of offering costs | - | - | - | ( | ) | - | - | - | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| ELOC shares issued for cash, net of offering costs | - | - | - | - | - | - | - | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Note payable, related party converted to preferred shares | - | - | - | - | - | - | - | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Preferred stock dividends | - | - | - | - | - | - | - | - | ( | ) | ( | ) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Foreign currency translation adjustments | - | - | - | - | - | - | - | - | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Deemed dividend-price protection, revaluation adjustment | - | - | - | - | - | - | - | - | ( | ) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Net loss | - | - | - | - | - | - | - | - | ( | ) | ( | ) | ( | ) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Balance, March 31, 2025 | $ | $ | $ | $ | $ | $ | $ | $ | $ | $ | $ | ( | ) | $ | ( | ) | $ | $ | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Issuance of common stock to employees for services | - | - | - | - | - | - | - | ( | ) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Conversion of preferred shares | - | - | ( | ) | - | ( | ) | ( | ) | ( | ) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| ELOC shares issued for cash, net of offering costs | - | - | - | - | - | - | - | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| ATM shares issued for cash, net of offering costs | - | - | - | - | - | - | - | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Secured credit facilities converted to common shares | 747,221 | - | - | - | - | - | - | - | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Preferred stock dividends | - | - | - | - | - | - | - | - | ( | ) | ( | ) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Foreign currency translation adjustments | - | - | - | - | - | - | - | - | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Deemed dividend-price protection, revaluation adjustment | - | - | - | - | - | - | - | - | ( | ) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Net loss | - | - | - | - | - | - | - | - | ( | ) | ( | ) | ( | ) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Balance, June 30, 2025 | $ | $ | $ | $ | $ | $ | $ | $ | $ | $ | $ | ( | ) | $ | $ | $ | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Warrants issued related to settlement | - | - | - | - | - | - | - | - | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Conversion of preferred shares | ( | ) | - | - | - | ( | ) | ( | ) | ( | ) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Series A Preferred Stock issued in exchange for Series F/F-1 Preferred Stock | - | - | - | - | ( | ) | ( | ) | ( | ) | - | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| ELOC shares issued for cash, net of offering costs | - | - | - | - | - | - | - | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Preferred stock dividends | - | - | - | - | - | - | - | - | ( | ) | ( | ) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Foreign currency translation adjustments | - | - | - | - | - | - | - | - | ( | ) | ( | ) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Derecognition of non-controlling interest related to discontinued operations | - | - | - | - | - | - | - | - | ( | ) | ( | ) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Net loss | - | - | - | - | - | - | - | - | ( | ) | ( | ) | ( | ) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Balance, September 30, 2025 | $ | $ | $ | $ | $ | $ | $ | $ | $ | $ | $ | ( | ) | $ | ( | ) | $ | ( | ) | $ | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Balance, December 31, 2025 | $ | $ | $ | $ | $ | $ | $ | $ | $ | $ | $ | ( | ) | $ | ( | ) | $ | $ | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Stock-based compensation expense | - | - | - | - | - | - | - | - | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Issuance of common stock for option exercises | - | - | - | - | - | - | - | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Issuance of restricted stock awards | - | - | - | - | - | - | - | - | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Issuance of common stock to employees for services | - | - | - | - | - | - | - | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Warrants exercised related to Series G Preferred Stock | - | - | - | - | - | - | - | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| ELOC shares issued for cash, net of offering costs | - | - | - | - | - | - | - | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| ATM shares issued for cash, net of offering costs | - | - | - | - | - | - | - | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Conversion of preferred shares | ( | ) | ( | ) | - | - | - | ( | ) | ( | ) | ( | ) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Preferred stock dividends | - | - | - | - | - | - | - | - | ( | ) | ( | ) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Foreign currency translation adjustments | - | - | - | - | - | - | - | - | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Net loss | - | - | - | - | - | - | - | - | ( | ) | ( | ) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Balance, March 31, 2026 | $ | $ | $ | $ | $ | $ | $ | $ | $ | $ | $ | ( | ) | $ | ( | ) | $ | $ | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Stock-based compensation expense | - | - | - | - | - | - | - | - | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Issuance of restricted stock awards | - | - | - | - | - | - | - | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Issuance of common stock to third parties for services | - | - | - | - | - | - | - | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Issuance of common stock to employees for services | - | - | - | - | - | - | - | - | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Common stock issued in business combination | - | - | - | - | - | - | - | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Warrants exercised related to Series G Preferred Stock | - | - | - | - | - | - | - | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| ELOC shares issued for cash, net of offering costs | - | - | - | - | - | - | - | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| ATM shares issued for cash, net of offering costs | - | - | - | - | - | - | - | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Shares surrendered in settlement of debt, related party | ( | ) | - | - | - | - | - | - | - | ( | ) | ( | ) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Preferred stock dividends | - | - | - | - | - | - | - | - | ( | ) | ( | ) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Foreign currency translation adjustments | - | - | - | - | - | - | - | - | ( | ) | ( | ) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Net loss | - | - | - | - | - | - | - | - | ( | ) | ( | ) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Balance, June 30, 2026 | $ | $ | $ | $ | $ | $ | $ | $ | $ | $ | $ | ( | ) | $ | ( | ) | $ | $ | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Stock-based compensation expense | - | - | - | - | - | - | - | - | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Issuance of common stock for option exercises | - | - | - | - | - | - | - | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Issuance of restricted stock awards | - | - | - | - | - | - | - | - | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Issuance of common stock to third parties for services | - | - | - | - | - | - | - | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Release of restricted stock units | - | - | - | - | - | - | - | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| ELOC shares issued for cash, net of offering costs | - | - | - | - | - | - | - | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| ATM shares issued for cash, net of offering costs | - | - | - | - | - | - | - | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Note payable, related party converted to common shares | - | - | - | - | - | - | - | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Preferred stock dividends | - | - | - | - | - | - | - | - | ( | ) | ( | ) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Foreign currency translation adjustments | - | - | - | - | - | - | - | - | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Net loss | - | - | - | - | - | - | - | - | ( | ) | ( | ) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Balance, September 30, 2026 | $ | $ | $ | $ | $ | $ | $ | $ | $ | $ | $ | ( | ) | $ | ( | ) | $ | $ | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
The accompanying notes are an integral part of these unaudited consolidated financial statements.
| 5 |
Beeline Holdings, Inc. and Subsidiaries
Consolidated Statements of Cash Flows
Nine Months Ended September 30, 2026 and 2025
(Dollars in thousands)
(Unaudited)
| 2026 | 2025 | |||||||
| Cash Flows From Operating Activities: | ||||||||
| Net loss | $ | ( | ) | $ | ( | ) | ||
| Net loss from discontinued operations | ||||||||
| Adjustments to reconcile net loss to net cash used in operating activities | ||||||||
| Gain on sale mortgage loans held for sale, net of direct costs | ( | ) | ( | ) | ||||
| Recovery for credit losses | ( | ) | ||||||
| Depreciation and amortization | ||||||||
| (Gain) loss on extinguishment of debt | ( | ) | ||||||
| Amortization of debt discount | ||||||||
| Stock compensation expense | ||||||||
| Issuance of restricted stock awards | ||||||||
| Preferred stock dividends | ( | ) | ( | ) | ||||
| Change in equity method investment | ( | ) | ||||||
| Gain on remeasurement of previously held equity interest | ( | ) | ||||||
| Issuance of common stock to third parties for services | ||||||||
| Issuance of common stock to employees for services | ||||||||
| Warrants issued related to settlement | ||||||||
| Noncash lease expense | ( | ) | ( | ) | ||||
| Changes in operating assets and liabilities: | ||||||||
| Proceeds from principal payments and sales of loans held for sale | ||||||||
| Originations of mortgage loans held for sale | ( | ) | ( | ) | ||||
| Interest rate lock commitment derivative | ( | ) | ( | ) | ||||
| Prepaid expenses and other current assets | ( | ) | ||||||
| Accounts receivable, net - related party | ( | ) | ||||||
| Accounts receivables, net | ( | ) | ( | ) | ||||
| Other receivable | ( | ) | ||||||
| Due from affiliate | ||||||||
| Other assets, net | ||||||||
| Accounts payable | ( | ) | ||||||
| Accrued liabilities | ( | ) | ||||||
| Loans committed for funding | ||||||||
| Accrued interest, net | ||||||||
| Other noncurrent liabilities | ( | ) | ||||||
| Net cash used in operating activities of continuing operations | ( | ) | ( | ) | ||||
| Net cash provided by operating activities of discontinued operations | ||||||||
| Net cash used in operating activities | ( | ) | ( | ) | ||||
| Cash Flows From Investing Activities: | ||||||||
| Note receivable | ( | ) | ||||||
| SAFE | ( | ) | ||||||
| Purchases of property and equipment | ( | ) | ||||||
| Purchase of internal-use software | ( | ) | ( | ) | ||||
| Net cash used in investing activities of continuing operations | ( | ) | ( | ) | ||||
| Net cash used in investing activities of discontinued operations | ( | ) | ||||||
| Net cash used in investing activities | ( | ) | ( | ) | ||||
| Cash Flows From Financing Activities: | ||||||||
| Net repayments/borrowings under warehouse lines of credit | ( | ) | ||||||
| ELOC shares issued for cash, net of offering costs | ||||||||
| ATM shares issued for cash, net of offering costs | ||||||||
| Series G Preferred Stock issued for cash, net of offering costs | ||||||||
| Proceeds from warrant exercise | ||||||||
| Proceeds from issuance of stock for option exercises | ||||||||
| Payments of principal on secured credit facilities | ( | ) | ||||||
| Proceeds from notes payable, related party | ||||||||
| Payments of principal on notes payable, related party | ( | ) | ||||||
| Proceeds from notes payable | ||||||||
| Payments of principal on notes payable | ( | ) | ||||||
| Net cash provided by financing activities | ||||||||
| Net (decrease) increase in cash | ( | ) | ||||||
| Effect of exchange rate changes on cash | ( | ) | ||||||
| Cash and restricted cash at the beginning of the period | ||||||||
| Cash and restricted cash at the end of the period | $ | $ | ||||||
| Supplemental Disclosure of Cash Flow Information | ||||||||
| Cash paid during the period for interest | $ | $ | ||||||
| Cash paid during the period for income taxes | $ | $ | ||||||
| Supplemental Disclosure of Non-Cash Investing and Financing Activities | ||||||||
| Note payable, related party converted to Preferred stock Series G | $ | $ | ||||||
| Conversion of preferred shares | $ | $ | ||||||
| Deemed dividend - Preferred stock Series G and warrant price protection | $ | $ | ||||||
| Secured credit facilities converted to common shares | $ | $ | ||||||
| Series A Preferred Stock issued in exchange for Series F/F-1 Preferred Stock | $ | $ | ||||||
| Shares surrendered in settlement of debt, related party | $ | $ | ||||||
| Note payable, related party converted to common shares | $ | $ | ||||||
| Issued common stock as consideration for the acquisition in a business combination | $ | $ | ||||||
The following table provides a reconciliation of cash and cash equivalents and restricted cash reported within the consolidated balance sheets that sum to the same such amounts shown in the consolidated statements of cash flows:
| 2026 | 2025 | |||||||
| Cash and cash equivalents | $ | $ | ||||||
| Restricted cash | ||||||||
| Total cash and cash equivalents and restricted cash | $ | $ | ||||||
The accompanying notes are an integral part of these unaudited consolidated financial statements.
| 6 |
Beeline Holdings, Inc.
Notes to Consolidated Financial Statements
September 30, 2026 and 2025
(unaudited)
1. NATURE OF BUSINESS
Beeline Holdings, Inc. together with its subsidiaries (collectively, the “Company”) was incorporated under the laws of Nevada in 2004. On March 12, 2025, the Company changed its name from Eastside Distilling, Inc. to Beeline Holdings, Inc., reflecting the Company’s current operations and focus as a fintech mortgage lender, fractional real estate equity purchase facilitator and title provider transforming the home ownership process into a shorter, easier path for millions of Americans seeking a digital experience. The Company has built a proprietary mortgage, equity purchase and title platform leveraging advanced technical tools with sophisticated language learning models and combining an appropriate amount of human interaction providing an efficient process for consumers to more easily access mortgage lending and financing using the Company’s online portal and services.
2. GOING CONCERN, LIQUIDITY, AND MANAGEMENT’S PLANS
These unaudited 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/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 consolidated 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 raise capital by the issuance of debt and/or equity.
On July 28, 2026, the Company entered into a non-binding letter of intent with TYTL Corp. (“TYTL”), a related party, regarding a proposed business combination pursuant to which TYTL would merge with and into the Company in an all-stock transaction. The proposed transaction is intended to combine the Company’s digital mortgage, lending, and title platform with TYTL’s blockchain-based real estate digital asset platform. Subject to the negotiation of definitive agreements, if the transaction occurs it is expected that the combined company will pursue the development and commercialization of products designed to facilitate institutional participation in residential real estate through blockchain-enabled infrastructure while integrating mortgage lending, including Non-QM mortgage products, title, and settlement processes. The parties also intend to continue the development of TYTL’s home equity product, which is designed to utilize a Regulation D-compliant security structure together with blockchain technology and recorded real property interests. The Company’s principal stockholder and Chief Executive Officer, Mr. Nicholas Liuzza, is also Chief Executive Officer of TYTL. In addition, Christopher Moe, the Company’s Chief Financial Officer, and Joseph Freedman, a director, are TYTL stockholders.
On June 30, 2026, the Company acquired the remaining outstanding equity interest in MagicBlocks, the artificial intelligence company whose technology powers Bob, the Company’s proprietary AI agent, and underpins key automation capabilities across the Company’s mortgage origination and title operations. The acquisition gives the Company full ownership and control of the AI technology already embedded across its platform. With MagicBlocks’ capabilities fully integrated, the Company expects to accelerate product innovation while supporting future initiatives across mortgage origination, title services, home equity products, and digital real estate transactions, reduce production costs, and improve the speed and consistency of the borrower experience. MagicBlocks continues to license its platform to other mortgage lenders and financial institutions. See Note 4 – Business Acquisition for further information on this business combination.
| 7 |
Beeline Holdings, Inc.
Notes to Consolidated Financial Statements
September 30, 2026 and 2025
(unaudited)
During 2026, the Company announced a strategic partnership with Structured Real Estate Group (“SRG”), a real estate developer, to directly integrate the Company’s mortgage platform into SRG’s proprietary AI-driven real estate platform. This will allow SRG’s homebuying customers to obtain loans through the Company generating loan revenues.
There can be no assurances that these business plans and actions will occur or 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 unaudited 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, 2026, its operating results for the three and nine months ended September 30, 2026 and 2025 and its cash flows for the nine months ended September 30, 2026 and 2025. 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, 2025. Interim results are not necessarily indicative of the results that may be expected for an entire fiscal year.
PRINCIPLES OF CONSOLIDATION
The unaudited consolidated financial statements include the consolidated accounts of the Company and its wholly-owned subsidiaries, Beeline Financial Holdings, Inc. (“Beeline Financial”), BeelineEquity, Inc. (“BeelineEquity”), Beeline Title Holdings, Inc. (“Beeline Title Holdings”), Beeline Mortgage Holdings, Inc. (“Beeline Mortgage”), Beeline Labs, Inc., Beeline Loans Pty Ltd. and MagicBlocks, Inc. (“MagicBlocks”). Intercompany transactions and balances have been eliminated.
Beeline Title Holdings has four subsidiaries, Beeline Title, LLC, Beeline Texas Title, LLC, Beeline Settlement Services, LLC, and Beeline Title Agency, LLC. Beeline Mortgage Holdings has one subsidiary, Beeline Loans, Inc. (“Beeline Loans”). MagicBlocks has one subsidiary, MagicBlocks Pty Ltd.
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 purchase price in the business combination, valuation of the fair value of the assets acquired and liabilities assumed in the business combination, valuation of lease liabilities and related right of use assets, contingent liability for loan repurchases, and valuation of non-cash equity grants and issuances, including but not limited to stock-based compensation. Actual results and outcomes may differ from management’s estimates and assumptions due to risks and uncertainties.
| 8 |
Beeline Holdings, Inc.
Notes to Consolidated Financial Statements
September 30, 2026 and 2025
(unaudited)
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, 2026 and December
31, 2025 was $
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 and Costs
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. Loan origination costs are charged to operations as incurred.
| 9 |
Beeline Holdings, Inc.
Notes to Consolidated Financial Statements
September 30, 2026 and 2025
(unaudited)
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 are earned at loan settlement. Title fees also include service fees for providing title and escrow services related to fractional equity sales, see below.
Fractional Equity Revenues, Related Party
The
Company receives a transaction fee of
Other Revenues
The Company receives a consulting fee related to certain agreed upon services provided to TYTL. Revenue is recognized on a monthly basis as the services are performed. Other revenues also include fees received from a marketing partner and software subscription fees.
Disaggregation of Revenues
The Company disaggregates its revenues as presented in its consolidated statements of operations.
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 consists 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. The Company adopted ASU 2025-05, Financial Instruments—Credit Losses (Topic 326): Measurement of Credit Losses for Accounts Receivable and Contract Assets on January 1, 2026, which had no impact on the consolidated financial statements.
| 10 |
Beeline Holdings, Inc.
Notes to Consolidated Financial Statements
September 30, 2026 and 2025
(unaudited)
BUSINESS COMBINATIONS
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 as of September 30, 2026 and December 31, 2025.
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.
LEASE OBLIGATIONS
When the Company enters into lease arrangements, the lease is accounted for under ASC 842, Leases. At the lease commencement date, the Company recognizes a leased ROU asset and corresponding lease liability based on the present value of the lease payments over the lease term. The Company elected not to recognize lease assets and lease liabilities for leases with an initial term of 12 months or less.
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
| 11 |
Beeline Holdings, Inc.
Notes to Consolidated Financial Statements
September 30, 2026 and 2025
(unaudited)
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
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 were no material items recorded at fair value on a nonrecurring basis as of September 30, 2026 and December 31, 2025.
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, 2026 and December 31, 2025.
| 12 |
Beeline Holdings, Inc.
Notes to Consolidated Financial Statements
September 30, 2026 and 2025
(unaudited)
DEBT DISCOUNT
The Company’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 gain (loss) for the three months ended
September 30, 2026 and 2025 was $
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 both the nine months ended September 30, 2026 and 2025.
As of September 30, 2026 and December 31, 2025, the exchange rate used to translate balance sheet amounts from Australian dollars into U.S. dollars was $ and $ , respectively. The average exchange rate used to translate operation amounts from Australian dollars into U.S. dollars was $ and $ for the nine months ended September 30, 2026 and 2025, respectively.
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 offerings. 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.
INVESTMENTS IN EQUITY METHOD INVESTEE
On
July 31, 2024, the Company invested in a related party, MagicBlocks, Inc., by purchasing, at par value, million shares, representing
an ownership interest of
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.
| 13 |
Beeline Holdings, Inc.
Notes to Consolidated Financial Statements
September 30, 2026 and 2025
(unaudited)
MARKETING AND ADVERTISING COSTS
Marketing
and advertising costs are expensed as incurred. For the nine months ended September 30, 2026 and 2025, marketing and advertising expenses
were $
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.
The Company evaluates all significant tax positions as required by ASC 740. As of September 30, 2026 and December 31, 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 2023, 2024 and 2025 remain open for potential audit.
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 currently operates in
| 14 |
Beeline Holdings, Inc.
Notes to Consolidated Financial Statements
September 30, 2026 and 2025
(unaudited)
RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS
In September 2025, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2025-06, Intangibles—Goodwill and Other—Internal-Use Software (Subtopic 350-40): Targeted Improvements to the Accounting for Internal-Use Software (“ASU 2025-06”). The amendments simplify the accounting for internal-use software development costs by removing the existing project stage model and replacing it with a principles-based framework for determining when software development costs should be capitalized. Under the new guidance, capitalization of internal-use software costs begins when (i) management has authorized and committed to funding the software project and (ii) it is probable that the project will be completed and the software will be used to perform its intended function. ASU 2025-06 also incorporates guidance related to website development costs and clarifies the presentation and disclosure requirements for capitalized software development costs. This pronouncement is effective for annual reporting periods beginning after December 15, 2027, including interim periods within those annual periods, with early adoption permitted. The Company is currently evaluating the impact that the adoption of this guidance will have on its consolidated financial statements and related disclosures.
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.
The Company has reviewed other accounting pronouncements issued by the FASB during the current year and determined that either they are not applicable to the Company’s operations or are not expected to have a material impact on the Company’s consolidated financial statements upon adoption.
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 deposit of $
4. BUSINESS ACQUISITION
On
June 30, 2026, the Company completed the acquisition of the remaining outstanding ownership interest of
| 15 |
Beeline Holdings, Inc.
Notes to Consolidated Financial Statements
September 30, 2026 and 2025
(unaudited)
The
purchase price was valued at $
The initial allocation of the purchase price to the fair value of the assets acquired and liabilities assumed was as follows:
| (Dollars in thousands) | June 30, 2026 | |||
| Cash and cash equivalents | $ | |||
| Property and equipment, net | ||||
| Accounts payable | ( | ) | ||
| Accrued liabilities | ( | ) | ||
| $ | ||||
The
Company incurred acquisition related costs of $
For income tax purposes, this was a non-taxable business combination as it was an all-stock transaction and accordingly goodwill will not be deductible for tax purposes.
Pro Forma Financial Information
The following unaudited pro forma consolidated results of operations for the nine months ended September 30, 2026 and 2025 assume that the acquisition of MagicBlocks was completed on January 1, 2025:
| (Dollars in thousands, except per share amounts) | 2026 | 2025 | ||||||
| Pro forma net revenues | $ | $ | ||||||
| Pro forma net losses | $ | ( | ) | $ | ( | ) | ||
| Pro forma basic and diluted net loss per share | $ | ) | $ | ) | ||||
Pro forma data does not purport to be indicative of the results that would have been obtained had these events actually occurred at the beginning of the periods presented and is not intended to be a projection of future results.
5. 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.
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 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 $
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 $
| 16 |
Beeline Holdings, Inc.
Notes to Consolidated Financial Statements
September 30, 2026 and 2025
(unaudited)
The operating results of Bridgetown have been classified as discontinued operations during the nine months ended September 30, 2025. The consolidated statement of operations for the prior period has been adjusted to reflect comparable information.
Income and expense related to Bridgetown Spirits were as follows for the nine months ended September 30, 2025:
| (Dollars in thousands) | 2025 | |||
| Net sales, spirits | $ | |||
| Cost of sales, spirits (inclusive of depreciation) | ||||
| Compensation and benefits | ||||
| Marketing and advertising | ||||
| Total operating expenses | ||||
| Loss from operations | ( | ) | ||
| Other income | ||||
| Net income (loss) from discontinued operations | ||||
| Loss from disposal of discontinued operations | ( | ) | ||
| Net loss from discontinued operations | $ | ( | ) | |
There
was a
Nimble Title Holdings
On November 17, 2025, the Company and minority partners of Nimble entered into a Dissolution Agreement, whereby the relationships contemplated by the LLC Agreement were terminated and Nimble was subsequently dissolved on November 25, 2025.
The operating results of Nimble have been classified as discontinued operations during the nine months ended September 30, 2025. The consolidated statement of operations for the prior period has been adjusted to reflect comparable information.
Income and expense related to Nimble and its subsidiaries were as follows for the nine months ended September 30, 2025:
| (Dollars in thousands) | 2025 | |||
| Title fees | $ | |||
| Total net revenues | ||||
| Compensation and benefits | ||||
| General and administrative expenses | ||||
| Other operating expenses | ||||
| Total operating expenses | ||||
| Net income from discontinued operations | $ | |||
6. BUSINESS SEGMENTS
The
Company’s CODM, the CEO, 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
Beeline Loans is an AI-driven fintech mortgage lender that also develops proprietary software in the form of major enhancements and new developments to its lending platform. Corporate allocates a portion of compensation and benefits, and general and administrative expenses to Beeline Loans, which is included in the segments’ financial data below.
| 17 |
Beeline Holdings, Inc.
Notes to Consolidated Financial Statements
September 30, 2026 and 2025
(unaudited)
Beeline Title Holdings provides title and loan closing services for the Company’s mortgage origination business and other lenders; and title closing services for the Company’s fractional equity transactions.
BeelineEquity provides customer service, transaction processing and platform support to TYTL who offers a fractional equity product to homeowners.
Corporate and unallocated activities primarily consist of general corporate expenses, including public company costs, executive compensation, legal and regulatory compliance, and other administrative functions that support the Company’s overall business. These activities also include holding company expenses, such as financing costs, accounting, legal, insurance, investor relations, and strategic corporate initiatives that are not directly attributable to the Company’s reportable segments. Corporate activities do not constitute a separate operating segment under ASC 280. Accordingly, amounts attributable to Corporate are excluded from the results of the Company’s reportable segments and are presented separately in the tables below as reconciling items in the reconciliation of total reportable segment results to consolidated financial results and total reportable segment net revenues to consolidated segment net revenues.
The Company measures segment performance to allocate resources primarily based on revenues of Beeline Loans, Beeline Title Holdings and BeelineEquity. 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.
The following tables present financial information for the Company’s reportable segments for the three and nine months ended September 30, 2026 and 2025 (dollars in thousands):
| Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||
| 2026 | 2025 | 2026 | 2025 | |||||||||||||
| Beeline Loans | ||||||||||||||||
| Gain on sale of loans, net | $ | $ | $ | $ | ||||||||||||
| Loan origination fees | ||||||||||||||||
| Interest income (expense) | ||||||||||||||||
| Interest income | ||||||||||||||||
| Interest expense | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| Interest income (expense), net | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| Other revenues | ||||||||||||||||
| Total net revenues | ||||||||||||||||
| Compensation, commissions and benefits | ||||||||||||||||
| General and administrative expenses | ||||||||||||||||
| Depreciation and amortization | ||||||||||||||||
| Marketing and advertising | ||||||||||||||||
| Other operating expenses | ||||||||||||||||
| Total operating expenses | ||||||||||||||||
| Loss from operations | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| Interest expense | ( | ) | ( | ) | ||||||||||||
| Gain on extinguishment of debt | ||||||||||||||||
| Net loss from continuing operations | $ | ( | ) | $ | ( | ) | $ | ( | ) | $ | ( | ) | ||||
| Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||
| 2026 | 2025 | 2026 | 2025 | |||||||||||||
| Beeline Title Holdings | ||||||||||||||||
| Title fees (includes related party fees of $ | $ | $ | $ | $ | ||||||||||||
| Total net revenues | ||||||||||||||||
| Compensation and benefits | ||||||||||||||||
| General and administrative expenses | ||||||||||||||||
| Marketing and advertising | ( | ) | ||||||||||||||
| Other operating expenses | ||||||||||||||||
| Total operating expenses | ||||||||||||||||
| Net loss from continuing operations | $ | ( | ) | $ | ( | ) | $ | ( | ) | $ | ( | ) | ||||
| 18 |
Beeline Holdings, Inc.
Notes to Consolidated Financial Statements
September 30, 2026 and 2025
(unaudited)
| Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||
| 2026 | 2025 | 2026 | 2025 | |||||||||||||
| BeelineEquity | ||||||||||||||||
| Fractional equity revenues, related party | $ | $ | $ | $ | ||||||||||||
| Total net revenues | ||||||||||||||||
| Compensation, commissions and benefits | ||||||||||||||||
| General and administrative expenses | ||||||||||||||||
| Marketing and advertising | ||||||||||||||||
| Other operating expenses | ||||||||||||||||
| Total operating expenses | ||||||||||||||||
| Net loss from continuing operations | $ | ( | ) | $ | $ | ( | ) | $ | ||||||||
Reconciliation of Total Reportable Segment Results to Consolidated Results
Corporate and unallocated results are not directly attributable to the Company’s reportable segment results. The following table reconciles total reportable segment results to the Company’s consolidated results for the three and nine months ended September 30, 2026 and 2025 (dollars in thousands):
| Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||
| 2026 | 2025 | 2026 | 2025 | |||||||||||||
| Beeline Loans | $ | ( | ) | $ | ( | ) | $ | ( | ) | $ | ( | ) | ||||
| Beeline Title Holdings | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| BeelineEquity | ( | ) | ( | ) | ||||||||||||
| Total reportable segments | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| Corporate and unallocated activities | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| Consolidated net loss from continuing operations | $ | ( | ) | $ | ( | ) | $ | ( | ) | $ | ( | ) | ||||
Reconciliation of Reportable Segment Net Revenues
Corporate and unallocated revenues primarily consist of net revenues not directly attributable to the Company’s reportable segments and are included as reconciling items to consolidated net revenues. The following table reconciles total net revenues of the Company’s reportable segments to consolidated net revenues for the three and nine months ended September 30, 2026 and 2025 (dollars in thousands):
| Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||
| 2026 | 2025 | 2026 | 2025 | |||||||||||||
| Beeline Loans | $ | $ | $ | $ | ||||||||||||
| Beeline Title Holdings | ||||||||||||||||
| BeelineEquity | ||||||||||||||||
| Total reportable segment net revenues | ||||||||||||||||
| Corporate and unallocated net revenues | ||||||||||||||||
| Total net revenues | $ | $ | $ | $ | ||||||||||||
| 19 |
Beeline Holdings, Inc.
Notes to Consolidated Financial Statements
September 30, 2026 and 2025
(unaudited)
7. FAIR VALUE MEASUREMENTS
Assets or liabilities measured at fair value on a recurring basis were as follows:
| (Dollars in thousands) | September 30, 2026 | December 31, 2025 | ||||||||||||||||||||||
| Description | Level 1 | Level 2 | Level 3 | Level 1 | Level 2 | Level 3 | ||||||||||||||||||
| Mortgage loans held for sale | $ | $ | $ | $ | $ | $ | ||||||||||||||||||
| Interest rate lock commitment derivative | ||||||||||||||||||||||||
A roll forward of the level 3 valuation financial instruments was as follows:
| (Dollars in thousands) | September 30, 2026 | December 31, 2025 | ||||||
| Balance, beginning of year | $ | $ | ||||||
| Change in fair value in gain on sale of loans, net | ||||||||
| Balance, end of period | $ | $ | ||||||
8. MORTGAGE LOANS HELD FOR SALE
Beeline sells substantially all of its originated mortgage loans to investors and 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, 2026 | December 31, 2025 | ||||||
| Mortgage loans held for sale | $ | $ | ||||||
| Net fair value adjustment | ||||||||
| Total mortgage loans held for sale, at fair value | $ | $ | ||||||
9. PROPERTY AND EQUIPMENT
Property and equipment consisted of the following:
| (Dollars in thousands) | September 30, 2026 | December 31, 2025 | ||||||
| Internal-use software | $ | $ | ||||||
| Furniture and fixtures | ||||||||
| Leasehold improvements | ||||||||
| Computers and hardware | ||||||||
| Total | ||||||||
| Less accumulated depreciation and amortization | ( | ) | ( | ) | ||||
| Total property and equipment, net | $ | $ | ||||||
Depreciation
expense related to property and equipment was $
Internal-use software consisted of the following:
| (Dollars in thousands) | September 30, 2026 | December 31, 2025 | ||||||
| Internal-use software | $ | $ | ||||||
| Less accumulated amortization | ( | ) | ( | ) | ||||
| Total internal-use software, net | $ | $ | ||||||
| 20 |
Beeline Holdings, Inc.
Notes to Consolidated Financial Statements
September 30, 2026 and 2025
(unaudited)
The estimated future amortization expense of internal-use software as of September 30, 2026 was as follows:
| (Dollars in thousands) | ||||
| Remaining 2026 | $ | |||
| 2027 | ||||
| 2028 | ||||
| 2029 | ||||
| 2030 | ||||
| Thereafter | ||||
| $ | ||||
The
Company’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 Chatbot “Bob”. The Company recorded $
10. INTANGIBLE ASSETS
Intangible assets consisted of the following:
| (Dollars in thousands) | September 30, 2026 | December 31, 2025 | ||||||
| Beeline brand | $ | $ | ||||||
| Customer list | ||||||||
| Total | ||||||||
| Less accumulated amortization | ( | ) | ( | ) | ||||
| Total intangible assets, net | $ | $ | ||||||
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, 2026, the Company determined that the Beeline brand was not impaired.
The
customer list has a useful life of
11. INVESTMENTS IN EQUITY METHOD INVESTEE
The Company’s investments in its related party equity method investee, MagicBlocks, included its equity method investment and its SAFEs on the consolidated balance sheets until June 30, 2026 when MagicBlocks’ remaining equity interest was acquired, see Note 4 – Business Acquisition, and consisted of the following:
| (Dollars in thousands) | September 30, 2026 | December 31, 2025 | ||||||
| Balance, beginning of year | $ | $ | ||||||
| SAFE Investments | ||||||||
| Loss on equity method investment | ( | ) | ( | ) | ||||
| Balance, end of period | $ | $ | ||||||
Intercompany profits and losses resulting from transactions between the Company and MagicBlocks were eliminated with the resulting adjustments recorded to the carrying amount of the investment and the Company’s share of losses of MagicBlocks. See Note 19 – Related Party Transactions.
In
March 2025, the Company entered into a Master Services Agreement with MagicBlocks for a monthly service fee of $
| 21 |
Beeline Holdings, Inc.
Notes to Consolidated Financial Statements
September 30, 2026 and 2025
(unaudited)
12. WAREHOUSE LINES OF CREDIT
On
September 21, 2021, Beeline Loans entered into an agreement with a lender for a $
On
October 6, 2025, Beeline Loans entered into an agreement with a different lender for a $
On
October 7, 2025, Beeline Loans entered into an agreement with a different lender for a $
Loans committed for funding, included in current liabilities on the consolidated balance sheets, represent loans that have closed as of the reporting date but have not yet been funded through the Company’s warehouse lines of credit. These loans are typically funded within the first few days of the subsequent reporting period. The related loans are included in mortgage loans held for sale, net, at fair value in the consolidated balance sheets. As of September 30, 2026 and December 31, 2025, loans committed for funding were $ million and , respectively.
The
Company has $
| 22 |
Beeline Holdings, Inc.
Notes to Consolidated Financial Statements
September 30, 2026 and 2025
(unaudited)
Interest
expense on the warehouse lines of credit was $
13. LEASE OBLIGATIONS
The
Company 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. The Company has leased approximately
As
the rate implicit in each lease is not readily determinable, the Company uses its incremental borrowing rate of
Lease
expense for operating leases is recognized on a straight-line basis over the lease term. Aggregate lease expense for both the nine months
ended September 30, 2026 and 2025 was $
Maturities of lease liabilities as of September 30, 2026 were as follows:
| (Dollars in thousands) | Operating Leases | Weighted-Average Remaining Term in Years | ||||||
| 2026 | $ | |||||||
| 2027 | ||||||||
| 2028 | ||||||||
| Total lease payments | ||||||||
| Less imputed interest (based on | ( | ) | ||||||
| Present value of lease liability | ||||||||
| Less current portion | ||||||||
| Lease liabilities, net of current portion | $ | |||||||
14. STOCKHOLDERS’ EQUITY
Issuance of Common Stock
2026
In January 2026, the Company issued shares of restricted common stock valued at $ per share based on the 2025 grant date fair value to an employee, of which $ million and $ was recognized in 2025 and January 2026, respectively, under the Amended and Restated 2025 Equity Incentive Plan (the “2025 Plan”). In addition, in August 2026, the Company issued under the 2025 Plan shares of restricted common stock valued at $ per share based on the 2025 grant date fair value to certain members of the Board of Directors, of which $million was recognized in both 2025 and during 2026.
| 23 |
Beeline Holdings, Inc.
Notes to Consolidated Financial Statements
September 30, 2026 and 2025
(unaudited)
During the nine months ended September 30, 2026, the Company issued shares of restricted stock awards (“RSAs”) to the Company’s board of directors under the 2025 Plan subject to certain vesting requirements. The total value of these RSA grants was $ million for the nine months ended September 30, 2026, see Note 15 – Stock-Based Compensation.
During
the nine months ended September 30, 2026, the Company issued shares of common stock upon the exercise of stock options issued under
its 2025 Plan for proceeds of $
In
June 2026, Mr. Liuzza, surrendered to the Company shares of the Company’s
common stock in lieu of repaying cash of $
On
June 30, 2026, the Company issued shares of common stock valued at $ per share to acquire its remaining outstanding ownership
interest of
During
the nine months ended September 30, 2026, the Company issued
shares of restricted common stock to certain members of the Board of Directors under the 2025 Plan with a value of $
During
the nine months ended September 30, 2026, the Company issued shares of common stock upon the exercise of warrants related
to the Company’s Series G Preferred Stock offering for proceeds of $
During
the nine months ended September 30, 2026, the Company issued shares of common stock for gross proceeds of $
During the nine months ended September 30, 2026, the Company issued a total of shares of common stock as a result of various preferred stock conversions as noted below.
2025
On
March 12, 2025, the Company implemented a
From
June 26, 2025 through September 30, 2025, certain holders of the Notes converted $
In June 2025, the Company issued shares of common stock in satisfaction of the former CEO’s employment agreement which was recorded as stock issuable of $ as of March 31, 2025.
In
February 2025, the Company issued shares of common stock related to a legal settlement agreed upon in October 2024 where $
During
2025, the Company sold a total of shares of common stock for gross proceeds of $
During 2025, the Company issued a total of shares of common stock as a result of various preferred stock conversions as noted below.
| 24 |
Beeline Holdings, Inc.
Notes to Consolidated Financial Statements
September 30, 2026 and 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 $
On
March 7, 2025,
Preferred Stock
The Company has million shares of preferred stock authorized at a par value of $ per share.
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 shares of Series F Preferred Stock and shares of Series F-1 Preferred Stock of the Company in exchange for the issuance to the holder of 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 shares of Series A Preferred Stock. Each share of Series A Preferred Stock had a stated value of $. Beginning
on the initial issuance date of the Series A Preferred Stock, the holder may convert up to $
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 had the right
to redeem the shares of Series A Preferred Stock, other than the Special Conversion Amount, at a redemption price of $ per underlying
share of common stock (based on the $
Each
share of Series A Preferred Stock was 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 was entitled to vote with the Company’s
common stock on an as-converted basis, subject to the
During the nine months ended September 30, 2025, shares of Series A Preferred Stock were converted into shares of common stock.
| 25 |
Beeline Holdings, Inc.
Notes to Consolidated Financial Statements
September 30, 2026 and 2025
(unaudited)
During the three months ended March 31, 2026, the remaining shares of Series A Preferred Stock were converted or exchanged into a total of shares of common stock resulting in no gain or loss being recognized.
In March 2026, the Certificate of Designation was withdrawn for the Series A Preferred Stock.
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 million shares of Series B Convertible Preferred Stock (“Series B”) at a purchase price of $
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 of the Company with an initial conversion price of $
The
Series B accrues dividends at a rate of
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 $ 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 $
In
conjunction with the Senior Secured Notes entered into on November 13, 2024, the Company entered in two side letters with two institutional
investors to each convert $
During the nine months ended September 30, 2025, shares of Series D Preferred Stock were converted into shares of common stock.
In January 2026, the Certificate of Designation was withdrawn for the Series D Preferred Stock.
| 26 |
Beeline Holdings, Inc.
Notes to Consolidated Financial Statements
September 30, 2026 and 2025
(unaudited)
Issuance of Series E Preferred Stock
Each
share of Series E Preferred Stock has a stated value of $ 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 $
On
October 21, 2025, the Company entered into a letter agreement with the investors pursuant to which they agreed to the redemption of their
shares of Series E Preferred Stock in exchange for payment of $ million. The Company redeemed the Series E Preferred Stock on November
12, 2025 and recorded a deemed dividend of $
Issuance of Series F and F-1 Preferred Stock
The
Merger that closed on October 7, 2024, was structured as an all-stock transaction. The stockholders of Beeline Financial received
preferred shares of Series F and preferred shares of Series F-1. Each share of Series F and F-1 Preferred Stock has a stated
value of $ 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 $
The
Series F and F-1 Preferred Stock was valued at $
During
the nine months ended September 30, 2026, investors converted and shares of Series F and F-1 Preferred Stock, respectively,
into shares of common stock. During the nine months ended September 30, 2025, and shares of Series F and F-1
Preferred Stock, respectively, were converted into shares of common stock.
On July 23, 2025, the Company entered into an agreement with a holder of and effected the exchange of shares of Series F Preferred Stock and shares of Series F-1 Preferred Stock of the Company in exchange for the issuance to the holder of shares of Series A Preferred Stock.
In
conjunction with the Senior Secured Notes entered into on November 13, 2024, the Company entered in a side letter which permitted an
affiliate who invested $
| 27 |
Beeline Holdings, Inc.
Notes to Consolidated Financial Statements
September 30, 2026 and 2025
(unaudited)
Issuance of Series G Preferred Stock
Each
share of Series G Preferred Stock has a stated value of $ 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 $
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 shares of Series G Preferred Stock and five-year warrants to purchase
a total of
On
March 25, 2025 (“the trigger date”), the Company sold common stock under the ELOC Agreement at $ per share, which was
less than the Series G Preferred Stock original conversion price of $
During
the nine months ended September 30, 2026, shares of Series G Preferred Stock were converted into shares of common stock.
During the nine months ended September 30, 2025, shares of Series G Preferred Stock were converted into shares of common
stock.
In
January 2025, the Company issued a consultant shares of Series G Preferred Stock that were issuable as of December 31, 2024.
In addition, in January 2025, the Company issued shares of Series G Preferred Stock for legal services of $
| 28 |
Beeline Holdings, Inc.
Notes to Consolidated Financial Statements
September 30, 2026 and 2025
(unaudited)
Warrants
During
nine months ended September 30, 2026,
There were no new warrants issued during the nine months ended September 30, 2026. A summary of all Warrant share activity as of and for the nine months ended September 30, 2026 is presented below:
| Warrant Shares | Weighted- Average Remaining Life (Years) | Weighted- Average Exercise Price | Aggregate Intrinsic Value (in millions) | |||||||||||||
| Outstanding as of December 31, 2024 | $ | $ | ||||||||||||||
| Additions due to price protection adjustment | ||||||||||||||||
| Issued with Series G Preferred Stock units sold | ||||||||||||||||
| Granted | - | |||||||||||||||
| Exercised | ( | ) | - | ( | ) | - | ||||||||||
| Expired | ( | ) | - | ( | ) | - | ||||||||||
| Outstanding as of December 31, 2025 | $ | $ | ||||||||||||||
| Exercised | ( | ) | - | ( | ) | ( | ) | |||||||||
| Expired | ( | ) | - | - | - | |||||||||||
| Outstanding as of September 30, 2026 | $ | $ | ||||||||||||||
On
March 25, 2025, the Company sold shares under the ELOC at $ 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 $ per
share and an increase in common shares issuable upon exercise of under the full price protection adjustment of the warrants.
The Company recorded a deemed dividend related to the warrants price protection of $
The
estimated fair value of the deemed dividend relating to the price protection adjustment is computed as the fair value of the warrants
with the reduced exercise price of $ less the fair value of the warrants at the original exercise price of $
| Volatility | % | |||
| Risk-free interest rate | % | |||
| Expected term (in years) | ||||
| Expected dividend yield | ||||
| Fair value of common stock | $ | - $ |
Beeline Warrants
In
the merger agreement, the Company agreed to assume
| 29 |
Beeline Holdings, Inc.
Notes to Consolidated Financial Statements
September 30, 2026 and 2025
(unaudited)
On September 8, 2016, the Company adopted the 2016 Equity Incentive Plan (the “2016 Plan”). As of September 30, 2026, there were options under the 2016 Plan. On February 6, 2025, the 2016 Plan was terminated and replaced with the 2025 Plan, and on August 1, 2025 the Board of Directors adopted the 2025 Plan.
2025 Equity Incentive Plan
The 2025 Plan initially authorized 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.
Stock Options
| # of Options | Weighted- Average Remaining Life (Years) | Weighted- Average Exercise Price | Aggregate Intrinsic Value (in millions) | |||||||||||||
| Outstanding as of December 31, 2024 | $ | $ | ||||||||||||||
| Options granted | ||||||||||||||||
| Options forfeited from 2016 Plan | ( | ) | ( | ) | ||||||||||||
| Outstanding as of December 31, 2025 | $ | $ | ||||||||||||||
| Options granted | ||||||||||||||||
| Options exercised | ( | ) | ( | ) | ||||||||||||
| Options forfeited | ( | ) | ( | ) | ||||||||||||
| Outstanding as of September 30, 2026 | $ | $ | ||||||||||||||
| Exercisable as of September 30, 2026 | $ | $ | ||||||||||||||
As of September 30, 2026, there were unvested options with an aggregate grant date fair value of $ million. The unvested options will vest in accordance with the vesting schedule in each respective option agreement, which is two years from the grant date. The aggregate intrinsic value of unvested options as of September 30, 2026 was . During the nine months ended September 30, 2026, options 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.
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 |
| 30 |
Beeline Holdings, Inc.
Notes to Consolidated Financial Statements
September 30, 2026 and 2025
(unaudited)
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 following assumptions were used in the Black-Scholes valuation model for options granted during the nine months ended September 30, 2026:
| Volatility | - | % | ||
| Risk-free interest rate | - | % | ||
| Expected term (in years) | - | |||
| Expected dividend yield | ||||
| Exercise price of common stock | $ | - |
There were no options issued for the nine months ended September 30, 2025.
The weighted-average grant-date fair value per share of stock options granted during the nine months ended September 30, 2026 was $ per share. The aggregate grant date fair value of the options granted during the nine months ended September 30, 2026 was $ million.
For
the nine months ended September 30, 2026, net compensation expense related to stock options was $
Restricted Stock Awards
RSAs represent issued shares of common stock that vest based on continued service. Compensation cost is measured based on the grant-date fair value of the Company’s common stock and recognized over the vesting period. Unvested RSAs are subject to forfeiture and are not considered outstanding for earnings per share purposes until vested.
| # of RSAs | Weighted-Average Fair Value | |||||||
| Unvested as of December 31, 2024 | $ | |||||||
| Granted | $ | |||||||
| Released | ( | ) | ( | ) | ||||
| Unvested as of December 31, 2025 | $ | |||||||
| Granted | $ | |||||||
| Released | ( | ) | ( | ) | ||||
| Forfeited | ( | ) | ( | ) | ||||
| Unvested as of September 30, 2026 | $ | |||||||
Stock-based compensation expense related to RSAs for the nine months ended September 30, 2026 was $ million and included in general and administrative expenses in the consolidated statements of operations. The total value of RSA grants was $ million for the nine months ended September 30, 2026. As of September 30, 2026 and December 31, 2025, total unrecognized compensation cost related to unvested RSAs was $ million and $ million, respectively, which is expected to be recognized over a weighted-average period of years and years, respectively, and included in additional paid-in capital on the consolidated balance sheets.
| 31 |
Beeline Holdings, Inc.
Notes to Consolidated Financial Statements
September 30, 2026 and 2025
(unaudited)
There were no RSAs grants for the nine months ended September 30, 2025.
Restricted Stock Units
Restricted stock units (“RSUs”) generally vest based on performance targets or continued service over a period of time and represent the right to receive one share of the Company’s common stock for each RSU that vests. The grant-date fair value of RSUs is measured based on the closing price of the Company’s common stock on the grant date. The Company accounts for forfeitures as they occur.
| # of RSUs | Weighted-Average Fair Value | |||||||
| Unvested as of December 31, 2024 | $ | |||||||
| RSUs granted | ||||||||
| Unvested as of December 31, 2025 | $ | |||||||
| RSUs granted | ||||||||
| RSUs released | ( | ) | ( | ) | ||||
| Unvested as of September 30, 2026 | $ | |||||||
Stock-based compensation expense related to RSUs for the nine months ended September 30, 2026 of $ million was included in general and administrative expenses and $ was included in compensation, commissions and benefits in the consolidated statements of operations. The total value of RSU grants was $ million for the nine months ended September 30, 2026. As of September 30, 2026 and December 31, 2025, total unrecognized compensation cost related to unvested RSUs was $ million and $ million, respectively.
There were no RSUs issued for the nine months ended September 30, 2025.
RSUs are settled in shares of the Company’s common stock upon vesting. Shares withheld to satisfy employee tax withholding obligations are accounted for as equity transactions.
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 against 28 defendants, of which Beeline Loans is included as a defendant in the US District Court, Middle District of Tennessee. On February 23, 2026, the plaintiffs filed an amended complaint removing 17 defendants, adding new named plaintiffs and adding additional description of Optimal Blue’s products to the complaint. Beeline Loans remains a defendant in the amended complaint. The complaint alleges Beeline Loans’ use of Optimal Blue’s pricing software violated federal antitrust laws. The Joint Defense Group (including Beeline Loans, Inc.) filed a Motion to Dismiss which is under review of the Court. The Company intends to defend the case vigorously.
| 32 |
Beeline Holdings, Inc.
Notes to Consolidated Financial Statements
September 30, 2026 and 2025
(unaudited)
Government Regulations Affecting Mortgage Loan Origination
The Company operates in a heavily regulated industry that is highly focused on consumer protection. The extensive regulatory framework to which the Company 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 the Company’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 significantly curtail or eliminate the CFPB’s operations, staffing, and funding. Presently, there is ongoing litigation regarding a lower federal court order enjoining efforts to significantly curtail or eliminate the CFPB, including further proceedings concerning the status and scope of that injunction. The full Court has elected to hear the appeal so the injunction remains in effect. Related litigation has resulted in an order requiring the CFPB to continue seeking funding necessary to carry out its statutory functions.
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.
The Company is also supervised by regulatory agencies under state law. From time-to-time, the Company 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 the Company’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.
| 33 |
Beeline Holdings, Inc.
Notes to Consolidated Financial Statements
September 30, 2026 and 2025
(unaudited)
The Company 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 $
The
Company relies on
The
Company sold its mortgage loans to
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 $
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 the conversion or 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 loss per common share for the nine months ended September 30, 2026 and 2025. For the nine months ended September 30, 2026, there were million shares of common stock equivalents that were antidilutive due to the Company’s net loss, including million under preferred stock, million under warrants, million stock options and million restricted stock units. For the nine months ended September 30, 2025, there were million shares of common stock equivalents that were antidilutive due to the Company’s net loss, including million under preferred stock, million under warrants and de minimus stock options.
19. RELATED PARTY TRANSACTIONS
In
June 2025, the Company partnered with TYTL, whereby TYTL finances certain residential real estate transactions funded through the sale
of digital asset which is backed by real property. In these transactions, TYTL purchases equity from homeowners seeking liquidity,
funding such purchases from the sale of the digital assets. The Company provides TYTL with certain services in connection with
these transactions, specifically through providing access to its platform through BeelineEquity, and providing title and escrow services
through Beeline Title Holdings in exchange for service fees. Other than providing its platform, and title and escrow services as noted
above, the Company is not involved in any digital asset or other transactions of TYTL. During the nine months ended September 30, 2026,
the Company recorded $
| 34 |
Beeline Holdings, Inc.
Notes to Consolidated Financial Statements
September 30, 2026 and 2025
(unaudited)
On
January 1, 2026, the Company entered into a one-year Master Services Agreement with TYTL for $
On
December 19, 2025, the Company advanced TYTL $ million, included in due from affiliate on its consolidated balance sheets as of December
31, 2025. During the nine months ended September 30, 2026, the Company further advanced $
On July 28, 2026, the Company entered into a non-binding Letter of Intent (the “LOI”) with TYTL regarding a proposed business combination pursuant, structured as a merger, to which TYTL would merge with and into the Company in an all-stock transaction. The LOI is non-binding with respect to the proposed business combination, except for certain customary provisions, including exclusivity, confidentiality, and termination provisions. Under certain circumstances described in the LOI, a party may be required to pay a termination fee of $0.2 million or, under certain specified circumstances, TYTL may pay up to $0.5 million. Since Mr. Liuzza, the principal shareholder and Chief Executive Officer of the Company and is a principal shareholder of TYTL, the Company created a special committee of its Board of Directors, which is empowered to approve the proposed merger and make all decisions on behalf of the Company without further Board of Directors approval. See Note 21 – Subsequent Events for further information.
In
June 2026, Mr. Liuzza surrendered to the Company shares of the Company’s common stock in lieu of repaying cash of $
On
August 12, 2026, Mr. Liuzza invested an additional $
Prior to acquiring the remaining outstanding equity interest in MagicBlocks on June 30, 2026, Mr. Liuzza, individually, entered into an additional SAFE with MagicBlocks. In January 2025, Mr. Liuzza entered into a SAFE with MagicBlocks. In addition, Mr. Liuzza was a member of the board of directors and Mr. Moe was the Treasurer for MagicBlocks.
| 35 |
Beeline Holdings, Inc.
Notes to Consolidated Financial Statements
September 30, 2026 and 2025
(unaudited)
In
addition, MagicBlocks advanced the Company $
During
March 2025, Mr. Liuzza purchased
In
February and March of 2025, Mr. Liuzza advanced the Company $
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 $
Jessica
Kennedy, Beeline Financial’s Chief Operating Officer, owns a
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 December 31, 2025, the Company paid Mr. Romano
$
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 $
20. INDEBTEDNESS
2026 Convertible Note, Related Party
On
August 12, 2026, Mr. Liuzza invested an additional $
2026 Promissory Note
On
July 31, 2026, the Company sold and issued to WVP Emerging Manager Onshore Fund LLC - C/M Capital Series (“WVP”) a promissory
note in the principal amount of $
2025 Notes Payable
On
May 13, 2025, the Company borrowed $
During
2023, Beeline Financial issued a note payable for proceeds of $
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 $
| 36 |
Beeline Holdings, Inc.
Notes to Consolidated Financial Statements
September 30, 2026 and 2025
(unaudited)
2025 Notes Payable-Related Parties
In
February and March of 2025, Mr. Liuzza advanced the Company a total of $
On
December 31, 2024, Mr. Liuzza loaned $
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 $
2025 Secured Credit Facilities
Purchase Agreement
On
November 13, 2024, the Company sold $
The
Notes had a maturity date of 120 days from issuance, were issued with a
In
March 2025, the Company and certain of the holders agreed to an extension of the maturity date to
On
May 12, 2025, the Company entered into an agreement with two Note holders to extend the maturity date to
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
| 37 |
Beeline Holdings, Inc.
Notes to Consolidated Financial Statements
September 30, 2026 and 2025
(unaudited)
The
Company also entered in three forms of side letters in 2024 with the investors which (i) permitted one investor which along with an affiliate
invested $
On
June 26, 2025, the Company amended the 120-day promissory note of $
Senior secured debentures
During
2024, Beeline Financial issued senior secured debentures of $
21. SUBSEQUENT EVENTS
Warehouse Lines of Credit
In
October 2026, one warehouse line of credit automatically renewed and one line was terminated. The Company has total warehouse lines of
credit of $
Stockholders’ Equity
Common Stock
Subsequent
to September 30, 2026, the Company sold
shares for gross proceeds of $
Warrants
On
October 1, 2026,
On
October 30, 2026, Mr. Liuzza exercised warrants related to Series G Preferred Stock and the Company issued shares of
common stock and received proceeds of $
Related Party Transactions
On October 30, 2026, Mr. Liuzza exercised warrants, see above.
2026 Promissory Note
On
October 1, 2026, the Company repaid the promissory note and accrued interest of $
TYTL Merger Agreement
As of November 11, 2026, the Company expects to shortly sign a Merger Agreement with TYTL. Execution is subject to resolving certain matters the Company believes are immaterial and resolvable. The execution is also subject to the Special Committee receiving a standard fairness opinion. The closing is subject to approval by a majority of the minority stockholders of the Company, which will generally exclude shares owned by the Company’s CEO, its Chief Financial Officer and one other director. Another key closing target is for TYTL to receive commitments and/or capital of at least $15 million to be able to fund purchases of equity with BeelineEQUITY. The Company’s CEO is a principal stockholder of TYTL and has agreed to execute a side letter where he will, upon closing, cancel and return to the Company one third of the shares he will receive and restrict another one third of his new shares he will receive subject to meeting the following market capitalizations. Approximately 16.67% of his shares will be restricted until the Company’s market capitalization is at least $100 million, and another approximately 16.66% of his shares will be restricted until the Company’s market capitalization is at least $200 million.
| 38 |
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, our expectations and plans for our technology including following our acquisition and integration of the remaining outstanding equity interest in MagicBlocks, expectations regarding our ability to introduce new offerings and increase transaction volumes without a proportionate increase in certain operating costs, our planned acquisition of TYTL Corp. (“TYTL”) and the perceived or potential benefits of such a transaction if it closes, prospective future fractional sale of home real estate transactions, the plans and expectations for the Company’s operating-expense reduction plan and potential timing and quantities of cost savings that may result therefrom, 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,” “designed,” and similar words. We have based these forward-looking statements largely on our current expectations and assumptions regarding events, conditions, and financial trends that may affect our future plans of operations, business strategy, results of operations, and financial position. 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 affordability, inflation, tariffs, the war in the Middle East, 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, our ability to comply with applicable regulatory requirements and new regulations and developments that may arise including the potential for regulatory changes regarding digital assets, the impact of the 2026 U.S. elections on the stock market and digital assets, artificial intelligence, and other areas that impact and may in the future impact the Company’s business, the possibility that our expectations and perceived benefits with respect to our strategic transactions and efforts, including the proposed merger with TYTL if that transaction closes, prove to be incorrect, risks with respect to integrating acquired businesses, our ability to satisfy closing conditions and obtain required approvals including stockholder approval to close the transaction within a reasonable period of time or at all, 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 or result in the benefits for which they were adopted or invested in, and the Risk Factors contained in our Form 10-K for the year ended December 31, 2025 and prospectus supplement dated March 10, 2026. 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.
Our Business
We are a fintech mortgage lender, fractional real estate equity purchase facilitator, and title services provider focused on streamlining the homeownership process through a digital platform. We utilize a proprietary technology platform that incorporates advanced analytics and machine learning tools, combined with human oversight, to support mortgage origination, equity purchase, and title services. Our business model is designed to provide consumers with more efficient access to mortgage and related financing solutions through its online platform. Approximately 77% of our loans are primarily non-qualified mortgage (“Non-QM”) loans, which typically serve borrowers with non-traditional income sources, including self-employment, investment, rental, or other non-W-2 income, or borrowers with significant assets.
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We primarily act as lender for our conventional loan originations, where we are responsible for underwriting. For Non-QM loans, we operate as a delegated lender (where we are responsible for the underwriting) and non-delegated lender (where we are not responsible for the underwriting). To a much lesser extent, we may act as a mortgage broker and a third-party wholesale lender is handling most fulfillment functions. We leverage our technology platform and industry expertise to provide an alternative to traditional, more manual mortgage origination processes for residential properties in the United States.
On July 28, 2026, we entered into a non-binding letter of intent with TYTL regarding a proposed business combination pursuant to which TYTL would merge with and into the Company in an all-stock transaction. As of November 11, 2026, we expect to sign the Merger Agreement in the very near term. The execution is subject to the Special Committee receiving a standard fairness opinion. The closing is subject to approval by a majority of the minority stockholders of the Company, which will generally exclude shares owned by the Company’s CEO, its Chief Financial Officer and one other director. Another key closing target is for TYTL to receive commitments and/or capital of at least $15 million to be able to fund purchases of equity with BeelineEQUITY.
The proposed transaction is intended to combine our digital mortgage, lending, and title platform with TYTL’s blockchain-based real estate digital asset platform. It is expected that the combined company will pursue the development and commercialization of products designed to facilitate institutional participation in residential real estate through blockchain-enabled infrastructure while integrating mortgage lending, including non-QM mortgage products, title, and settlement processes. The parties also intend to continue the development of TYTL’s home equity product, which is designed to utilize a Regulation D-compliant security structure together with blockchain technology and recorded real property interests.
As digital asset adoption accelerates and becomes regulated by federal and state governments, we are positioning ourselves as a leader in this fast-moving ecosystem, offering trusted infrastructure to help lenders scale into a future where digital assets and compliance go hand-in-hand. Through our technology platform, we offer a fractional equity product in collaboration with our related party partner, whereby TYTL will manage an independently owned special-purpose vehicle (“SPV”), not yet formed, by an outside fund or sponsor that would hold a pooled portfolio of deed-recorded fractional residential real estate interests. TYTL will mint blockchain-based digital assets that it has developed, which are expected to represent ownership interests in the SPV with exposure to its property portfolio. We provide TYTL access to our platform through our subsidiary, BeelineEquity, and provide title and escrow services through Beeline Title Holdings. Other than providing our technology platform and title and escrow services, we are not involved in any digital asset or other transactions of TYTL.
As of June 30, 2026, we acquired the remaining outstanding equity interest in MagicBlocks, the artificial intelligence company whose technology powers Bob, our proprietary AI agent, and underpins key automation capabilities across our mortgage origination and title operations. The acquisition gives us full ownership and control of the AI technology already embedded across its platform. With MagicBlocks’ capabilities fully integrated, we expect to accelerate product innovation while supporting future initiatives across mortgage origination, title services, home equity products, and digital real estate transactions, reduce production costs, and improve the speed and consistency of the borrower experience. MagicBlocks continues to license its platform to other mortgage lenders and financial institutions.
During 2026, we announced a strategic partnership with Structured Real Estate Group (“SRG”), a real estate developer, to directly integrate our mortgage platform into SRG’s proprietary AI-driven real estate platform that enables homebuyers to receive fully customized mortgage and title solutions within a single, unified platform to evaluate financing, understand total ownership costs, and initiate the mortgage process instantly without leaving the SRG platform. SRG’s platform is designed as a next-generation real estate environment, combining property selection, smart home infrastructure, and community-level technology into a single digital interface. By embedding our mortgage and title capabilities directly into this ecosystem, the partnership removes friction from the homebuying process and creates a more transparent, efficient path to homeownership. The initial deployment of this integrated platform will support the development of approximately 2,000 new homes in the Dallas/Fort Worth area over the next 36 months.
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Factors Affecting Our Performance
Interest Rate Sensitivity
Changes in interest rates continue to significantly affect mortgage origination volumes, borrower demand, and the overall mortgage lending environment. Lower interest rates generally stimulate refinancing activity and may increase purchase mortgage demand, while higher interest rates tend to reduce refinancing activity and negatively affect housing affordability. Refinancing volumes are particularly sensitive to changes in mortgage interest rates, as borrowers evaluate the potential savings associated with refinancing existing mortgage obligations.
During the nine months ended September 30, 2026, mortgage interest rates remained elevated and experienced periods of volatility, reflecting ongoing inflationary pressures, economic conditions, and uncertainty regarding monetary policy. According to Freddie Mac, the average 30-year fixed mortgage rate was 7.03% as of September 24, 2026, compared with 6.30% during the corresponding period in 2025. These conditions continued to constrain refinancing activity and influence consumer borrowing decisions.
We are exposed to interest rate risk through our mortgage lending activities. Increases in interest rates generally reduce the fair value of our loans held for sale (“LHFS”) and may affect the fair value of our interest rate lock commitments (“IRLCs”), depending on the contractual terms and related hedging positions. Conversely, declining interest rates generally increase the fair value of fixed-rate LHFS, while the impact on IRLCs depends on their characteristics. We utilize IRLCs in connection with our mortgage origination activities and manage our exposure to interest rate movements between loan commitment, funding, and sale.
Our operating results are expected to remain sensitive to interest rate fluctuations and broader macroeconomic conditions. As we continue to scale our operations and increase funded loan volumes, changes in interest rates, origination activity, loan pricing, and secondary market conditions may contribute to fluctuations in revenues, profitability, and cash flows, including the potential for continued net losses.
Market and Economic Conditions
The mortgage lending industry continues to be influenced by broader economic conditions, including inflation, employment levels, consumer confidence, housing affordability, and monetary policy. During the nine months ended September 30, 2026, elevated mortgage interest rates and economic uncertainty continued to affect borrower demand and mortgage origination activity.
Purchase mortgage originations are influenced by housing inventory, home prices, household formation, and seasonal trends, with transaction volumes generally increasing during the spring and summer months. Refinancing activity remains primarily dependent on prevailing mortgage rates relative to borrowers’ existing mortgage obligations.
Although consumer demand for housing and credit has continued, affordability constraints and higher borrowing costs have caused some prospective borrowers to delay home purchases or refinancing decisions. In addition, volatility in capital markets and changes in investor demand for mortgage loans may affect secondary market pricing, loan sale execution, and gain-on-sale margins.
These factors may result in fluctuations in our origination volumes, revenues, and operating results from period to period. We continue to monitor market conditions and evaluate opportunities to improve operating efficiencies, manage costs, and respond to changes in borrower demand.
Housing Supply and Demand
Housing inventory levels, home prices, and affordability remain significant factors influencing mortgage purchase activity. During the nine months ended September 30, 2026, the residential housing market continued to experience affordability challenges resulting from elevated mortgage interest rates and home prices, although inventory conditions improved in certain markets.
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Limited housing inventory and the reluctance of existing homeowners to sell properties financed with mortgage rates below prevailing market rates have continued to constrain housing turnover. This interest rate lock-in effect has reduced the availability of existing homes for sale and contributed to affordability pressures for prospective homebuyers.
While increases in available housing inventory may support purchase activity over time, higher financing costs, construction expenses, and economic uncertainty may continue to limit housing market growth. New residential construction and improvements in housing supply could provide additional opportunities for mortgage origination activity; however, the timing and extent of any recovery remain uncertain.
We expect housing supply, affordability, and demographic trends to remain important drivers of purchase mortgage demand and our future operating performance.
Adoption of Digital Lending Solutions
The mortgage lending industry continues to evolve as consumers increasingly seek digital, convenient, and transparent financing solutions. Technology-enabled lending platforms offer opportunities to simplify the mortgage application and approval process, reduce documentation requirements, improve communication, and shorten transaction timelines.
During the nine months ended September 30, 2026, digital capabilities remained an important competitive consideration as mortgage lenders sought to improve operational efficiency and customer experience in a challenging origination environment. Consumers increasingly expect online application capabilities, electronic document submission, automated communications, and greater visibility into the status of their financing transactions.
Our growth depends, in part, on our ability to provide an efficient and competitive digital lending experience. Our platform is designed to streamline mortgage origination processes, improve accessibility, and reduce friction associated with traditional lending methods.
In addition, financial institutions, real estate professionals, and other participants in the homeownership ecosystem continue to evaluate technology-enabled solutions to improve productivity and customer engagement. We believe these developments may create opportunities for digital lending platforms and related services, although competition and evolving consumer expectations may require continued investment in technology and platform capabilities.
Technology and Product Expansion
We continue to invest in technology and platform development to automate and streamline mortgage origination activities, enhance operational efficiency, improve processing accuracy, and reduce the cost of originating and servicing customer relationships.
Our technology initiatives are intended to improve workflow automation, data integration, underwriting support, document processing, and communication among borrowers, lending professionals, and third-party service providers. We also continue to evaluate the use of advanced analytics and artificial intelligence-enabled tools to improve efficiency and support decision-making, subject to applicable regulatory, data privacy, and operational requirements.
Our platform is designed to support the integration of additional lending products, services, and strategic partners as our business expands. We believe that leveraging our existing technology infrastructure may enable us to introduce new offerings and increase transaction volumes without a proportionate increase in certain operating costs. However, continued investment may be required to support product development, regulatory compliance, cybersecurity, and platform scalability.
We also intend to evaluate opportunities to expand our home financing product offerings to address a broader range of consumer needs, including purchase mortgages, refinancing, and home equity financing solutions. These initiatives are intended to diversify revenue opportunities, improve customer engagement, and strengthen our competitive position.
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The timing, costs, and success of these initiatives remain subject to market conditions, customer adoption, regulatory requirements, and our ability to execute our growth strategy.
Customer Acquisition and Growth
Our ability to achieve sustainable growth depends on attracting and retaining customers while maintaining an efficient customer acquisition cost structure. Customer acquisition is influenced by mortgage market conditions, consumer demand, competitive pricing, brand recognition, referral relationships, and the effectiveness of our marketing and distribution channels.
During the nine months ended September 30, 2026, elevated mortgage interest rates and affordability challenges continued to create a competitive environment for mortgage originators. Reduced refinancing opportunities and constrained purchase activity may increase competition for qualified borrowers and place pressure on customer acquisition costs and loan origination margins.
We continue to focus on improving the effectiveness of our digital marketing strategies, enhancing customer conversion rates, developing referral and strategic partner relationships, and leveraging technology to improve the customer experience.
Our ability to scale operations efficiently will depend, in part, on increasing funded loan volumes while managing marketing expenditures, personnel costs, technology investments, and other operating expenses. If customer acquisition efforts become less effective due to market conditions, increased competition, changes in digital advertising platforms, or reduced visibility through lead generation channels, we may be required to increase marketing expenditures or adjust our acquisition strategies.
We expect customer acquisition efficiency, borrower conversion rates, and operating leverage to remain important factors affecting our future revenues, profitability, and overall financial performance.
Recent Developments
Inflation remained above the Federal Reserve’s long-term objective during the third quarter of 2026, and price pressures strengthened toward quarter-end. The Consumer Price Index for All Urban Consumers increased 3.7% over the 12 months ended September 2026. Energy prices rose 5.2% in September and were 20.4% higher than a year earlier, while the index for all items less food and energy increased 2.6% over the year. Shelter costs also continued to rise, with the shelter index up 3.2% over the prior 12 months. Although core inflation remained below headline inflation, the recent increase in energy prices and ongoing shelter and services costs indicate that the path toward the Federal Reserve’s 2% objective remains uncertain.
The Company’s results may be affected by changes in energy prices, tariffs and other trade measures, supply-chain conditions, and geopolitical developments, including developments in the Middle East. These factors may influence inflation expectations, consumer confidence, the cost of goods and services, and financial-market volatility. Changes in trade policy or further disruption to energy markets could increase input costs and place renewed upward pressure on inflation. Conversely, a sustained moderation in these pressures could support lower interest rates and improved housing activity. The timing, extent and duration of these effects cannot be predicted, and the effects may vary across the Company’s products and borrower segments.
Housing affordability remained constrained by elevated home prices, limited inventory in many markets, and mortgage rates substantially above levels prevailing before the recent tightening in financial conditions. These conditions have continued to weigh on home-purchase and refinance activity. They may also affect borrower qualification, purchase timing, loan size and the mix of products sought by customers. The Company believes that persistent housing supply constraints and continued residential construction could contribute to improved inventory over time; however, the timing and degree of any improvement are uncertain. Changes in home prices, household income, employment conditions and consumer confidence may also affect demand for the Company’s mortgage and home-equity products.
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Mortgage interest rates rose during the third quarter. The average 30-year fixed mortgage rate reported by Freddie Mac increased from 6.49% on June 25, 2026 to 7.03% on September 24, 2026, its highest level since early 2025. Rates remained volatile after quarter-end: Freddie Mac reported a weekly average of 7.24% as of October 29, 2026, compared with 6.17% a year earlier. The late-October decline from the month’s higher readings provided some relief to prospective borrowers, but rates remained elevated and continued to constrain affordability. Mortgage rates are influenced by Treasury yields, mortgage-backed securities pricing, inflation expectations, investor demand and other market factors, and may not move in tandem with the Federal Reserve’s policy rate.
On October 28, 2026, the Federal Open Market Committee maintained the target range for the federal funds rate at 3.75% to 4.00%. The Committee stated that economic activity was expanding at a strong pace and that inflation remained elevated, while uncertainty, including from geopolitical developments, remained high. The Federal Reserve’s policy decisions and communications may affect short-term borrowing costs and expectations for longer-term rates, but they do not directly determine the mortgage rates available to borrowers. The Company therefore cannot predict whether future policy actions will reduce mortgage rates or improve mortgage origination volumes. Persistent inflation, increases in Treasury yields or further volatility in capital markets could continue to pressure borrower demand and the Company’s production mix.
During the third quarter, the Company continued to focus on higher-margin non-QM products, including bank statement and debt service coverage ratio loans, and on technology intended to improve loan pricing, customer acquisition and operating efficiency.
On October 20, 2026, the Company announced an additional operating-expense reduction plan targeting approximately $0.3 million of monthly savings, or $3.0 million on an annualized basis, incremental to cost reductions implemented earlier in 2026. The plan includes workforce reductions, infrastructure consolidation and elimination of legacy overhead. In addition, as part of the estimated savings, certain employees deferred a portion of their compensation until February 1, 2027. The Company estimated that it would incur approximately $0.3 million of one-time transition costs through December 1, 2026, after which it expects the full monthly savings to be realized. These amounts represent management’s estimates; the timing and amount of savings and transition costs may differ from expectations. The Company expects that the actions, together with its investment in automation and higher-value products, will reduce its fixed-cost structure and improve operating leverage.
The Company continued to advance its proposed all-stock business combination with TYTL following the non-binding LOI entered into on July 28, 2026. Management believes the merger is days away from definitive agreements being signed subject to shareholder approval and closing conditions. Of the anticipated nine million merger shares that the Company’s CEO will receive, he will cancel one third of those shares, assuming closing, to support Company’s capital-raising initiatives, potentially reducing dilution to existing shareholders. Another third will be restricted until achieving Company market capitalization milestones between $100 million and $200 million, with the remaining third issued at closing and subject to lockup restrictions. The proposed transaction would combine the Company’s mortgage origination, title and settlement operations with TYTL’s residential-equity platform. The terms, timing and completion of the transaction are uncertain, and the parties may not enter into definitive agreements or complete the proposed transaction.
Results of Operations
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 operating results of Nimble Title Holdings, LLC and its subsidiaries, and Bridgetown Spirits Corp. have been classified as discontinued operations during the nine months ended September 30, 2025.
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Three and Nine Months Ended September 30, 2026 Compared to the Three and Nine Months Ended September 30, 2025
| Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||
| (Dollars in thousands) | 2026 | 2025 | 2026 | 2025 | ||||||||||||
| Revenues | ||||||||||||||||
| Gain on sale of loans, net | $ | 2,053 | $ | 1,671 | $ | 5,650 | $ | 3,598 | ||||||||
| Loan origination fees | 492 | 302 | 1,268 | 638 | ||||||||||||
| Interest income (expense) | ||||||||||||||||
| Interest income | 172 | 90 | 509 | 232 | ||||||||||||
| Interest expense | (174 | ) | (112 | ) | (523 | ) | (241 | ) | ||||||||
| Interest income (expense), net | (2 | ) | (22 | ) | (14 | ) | (9 | ) | ||||||||
| Title fees (includes related party fees of $2 and $0 for the three months ended September 30, 2026 and 2025, respectively, and $19 and $12 for the nine months ended September 30, 2026 and 2025, respectively) | 380 | 374 | 1,167 | 1,012 | ||||||||||||
| Fractional equity revenues, related party | 20 | - | 78 | - | ||||||||||||
| Other revenues (includes related party fees of $50 and $150 for the three and nine months ended September 30, 2026, respectively) | 71 | 2 | 186 | 12 | ||||||||||||
| Total net revenues | 3,014 | 2,327 | 8,335 | 5,251 | ||||||||||||
| Operating Expenses | ||||||||||||||||
| Compensation, commissions and benefits | 2,881 | 1,994 | 8,935 | 6,221 | ||||||||||||
| General and administrative expenses | 1,270 | 871 | 4,385 | 4,108 | ||||||||||||
| Depreciation and amortization | 845 | 831 | 2,466 | 2,487 | ||||||||||||
| Marketing and advertising | 993 | 687 | 3,163 | 1,999 | ||||||||||||
| Other operating expenses | 799 | 800 | 2,817 | 1,942 | ||||||||||||
| Total operating expenses | 6,788 | 5,183 | 21,766 | 16,757 | ||||||||||||
| Loss from operations | (3,774 | ) | (2,856 | ) | (13,431 | ) | (11,506 | ) | ||||||||
| Other income (expense), net | ||||||||||||||||
| Interest income | 2 | 4 | 15 | 5 | ||||||||||||
| Interest expense | (55 | ) | (69 | ) | (55 | ) | (2,346 | ) | ||||||||
| Gain (loss) on extinguishment of debt | 17 | (684 | ) | 17 | (610 | ) | ||||||||||
| Change in equity method investment | - | - | (148 | ) | 129 | |||||||||||
| Gain on remeasurement of previously held equity interest | - | - | 480 | - | ||||||||||||
| Other income, net | - | 4 | - | 18 | ||||||||||||
| Total other income (expense), net | (36 | ) | (745 | ) | 309 | (2,804 | ) | |||||||||
| Net loss from continuing operations | $ | (3,810 | ) | $ | (3,601 | ) | $ | (13,122 | ) | $ | (14,310 | ) | ||||
Net Revenues
Gain on sale of loans, net increased $0.4 million, or 24%, to $2.1 million for the three months ended September 30, 2026 compared to $1.7 million for the three months ended September 30, 2025, and increased $2.1 million, or 58%, to $5.7 million for the nine months ended September 30, 2026 compared to $3.6 million for the nine months ended September 30, 2025. Both periods were driven by increased loan originations and loan pricing.
Loan origination fees increased $0.2 million, or 67%, to $0.5 million for the three months ended September 30, 2026 compared to $0.3 million for the three months ended September 30, 2025, and increased $0.7 million, or 117%, to $1.3 million for the nine months ended September 30, 2026 compared to $0.6 million for the nine months ended September 30, 2025, driven by increased loan originations. The quantity of loan originations increased by 26, or 11%, to 268 for the three months ended September 30, 2026 compared to 242 for the three months ended September 30, 2025, and increased by 239, or 43%, to 796 for the nine months ended September 30, 2026 compared to 557 for the nine months ended September 30, 2025.
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Title fees were flat for the three months ended September 30, 2026 and 2025. Title fees increased $0.2 million, or 20%, to $1.2 million for the nine months ended September 30, 2026 compared to $1.0 million for the nine months ended September 30, 2025 primarily driven by increased settlement fees during the nine months ended September 30, 2026.
Operating Expenses
Compensation, commissions and benefits increased $0.9 million, or 45%, to $2.9 million for the three months ended September 30, 2026 compared to $2.0 million for the three months ended September 30, 2025, and increased $2.7 million, or 44%, to $8.9 million for the nine months ended September 30, 2026 compared to $6.2 million for the nine months ended September 30, 2025. Both periods of 2026 were primarily driven by increased employee stock compensation expense of $0.9 million for the three months and $2.3 million for the nine months, and related to our 2025 Equity Incentive Plan, which was adopted in October of 2025.
General and administrative expenses increased $0.4 million, or 44%, to $1.3 million for the three months ended September 30, 2026 compared to $0.9 million for the three months ended September 30, 2025, and increased $0.3 million, or 7%, to $4.4 million for the nine months ended September 30, 2026 compared to $4.1 million for the nine months ended September 30, 2025. Both periods were primarily driven by increased vendor and Board of Directors stock compensation expense related to our 2025 Equity Incentive Plan, which was adopted in October of 2025.
Depreciation and amortization was $0.8 million for both the three months ended September 30, 2026 and 2025, and $2.5 million for both the nine months ended September 30, 2026 and 2025.
Marketing and advertising increased $0.3 million, or 43%, to $1.0 million for the three months ended September 30, 2026 compared to $0.7 million for the three months ended September 30, 2025, and increased $1.2 million, or 60%, to $3.2 million for the nine months ended September 30, 2026 compared to $2.0 million for the nine months ended September 30, 2025. Both periods were primarily due to increased leads reflective of higher loan originations.
Other operating expenses were flat for both the three months ended September 30, 2026 and 2025, and increased $0.9 million, or 47%, to $2.8 million for the nine months ended September 30, 2026 compared to $1.9 million for the nine months ended September 30, 2025. The increase for the nine months ended September 30, 2026 was primarily due to increased fees charged by investors of our loans, which is directly related to higher loan originations, and increased software service fees. As disclosed above under “Recent Developments” the Company recently adopted an operating-expenses reduction plan which, subject to various factors beyond the Company’s control, is intended to reduce costs by approximately $0.3 million per month.
Other Income (Expense)
Interest expense, exclusive of the warehouse line of credit, was $0.1 million for both the three and nine months ended September 30, 2026 related to interest on debt and the amortization of debt. 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 related to interest on debt and the amortization of debt and warrant related expenses, respectively.
Gain on Remeasurement of Previously Held Equity Interest
On June 30, 2026, we completed the acquisition of the remaining outstanding ownership interest of 52.4% in MagicBlocks. The fair value of our original 47.6% interest was remeasured at $0.5 million based on an independent business valuation of MagicBlocks of $1.0 million.
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.
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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 unaudited consolidated financial statements and notes thereto in their entirety included elsewhere in this Report, 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:
● 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 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;
● 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
● 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:
● 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;
● Adjusted EBITDA excludes non-cash stock-based compensation expense which is a significant recurring expense for our business and an important part of our compensation strategy;
● Adjusted EBITDA does not reflect changes in, or cash requirements for, our working capital needs;
● Adjusted EBITDA does not include 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
● 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.
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Adjusted EBITDA
We calculate adjusted EBITDA as net income (loss) adjusted for the impact of interest expense, depreciation and amortization expense, gain on remeasurement of previously held equity interest, 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 loss to adjusted EBITDA for the three and nine months ended September 30, 2026 and 2025 (unaudited):
| Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||
| (Dollars in thousands) | 2026 | 2025 | 2026 | 2025 | ||||||||||||
| Net loss | $ | (3,810 | ) | $ | (3,962 | ) | $ | (13,122 | ) | $ | (15,029 | ) | ||||
| Interest expense | 55 | 69 | 55 | 2,346 | ||||||||||||
| Depreciation and amortization | 845 | 831 | 2,466 | 2,487 | ||||||||||||
| Stock-based compensation expense | 1,089 | - | 3,129 | 130 | ||||||||||||
| Non-recurring expenses (1) | 63 | - | 571 | 321 | ||||||||||||
| Gain on remeasurement of previously held equity interest | - | - | (480 | ) | - | |||||||||||
| Net loss from discontinued operations | - | 361 | - | 719 | ||||||||||||
| Adjusted EBITDA | $ | (1,758 | ) | $ | (2,701 | ) | $ | (7,381 | ) | $ | (9,026 | ) | ||||
| (1) | For the three and nine months ended September 30, 2026, non-recurring expenses included costs related to the class action complaint. For the nine months ended September 30, 2025, non-recurring expenses included merger costs related to the shareholder 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
Net cash used in operating activities of continuing operations decreased from $12.1 million for the nine months ended September 30, 2025 to $1.6 million for the nine months ended September 30, 2026 primarily due to increased origination volume related to the availability of $25 million in our warehouse lines of credit.
For the nine months ended September 30, 2026, net cash used in investing activities of continuing operations was $0.2 million related to internal-use software development costs. 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, 2026, net cash provided by financing activities of continuing operations was $0.8 million from $5.6 million raised from equity transactions and $0.8 million from proceeds from notes payable, offset by net repayments under the warehouse lines of credit of $5.6 million related to adding two warehouse lines of credit of $5.0 million each in October 2025. 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.
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 equity offerings will be sufficient to meet our liquidity needs.
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Liquidity. Our primary sources of liquidity consist of cash and cash equivalents and equity offerings. 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 November 2, 2026, the Company had approximately $1.4 million in cash as described below.
For the nine months ended September 30, 2026, we sold 2,441,610 shares of common stock for gross proceeds of $3.5 million under the ELOC Agreement.
During nine months ended September 30, 2026, we sold 1,594,877 shares for gross proceeds of $2.1 million under an at the market offering. Subsequent to September 30, 2026, we further sold 222,991 shares of common stock for gross proceeds of $0.2 million.
On October 30, 2026, Mr. Liuzza exercised 400,000 warrants related to Series G Preferred Stock and we issued 400,000 shares of common stock and received proceeds of $0.3 million.
With respect to forecasting our cash requirements over the next 12 months, we would need to raise approximately $6 million, which may fluctuate based on operational performance. The availability of additional financing will be largely dependent on our common stock price and liquidity as we utilize our ELOC and ATM Agreements as well as on our operating success, including improved margins as well as operational improvements, which will be necessary to attract investors. However, there can be no assurance that we will be successful in securing the necessary capital on favorable terms, or at all. We have no material off-balance sheet arrangements as of the date of this Report.
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 consolidated financial statements for the nine months ended September 30, 2026 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.
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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 and Costs
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. Loan origination costs are charged to operations as incurred.
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 are earned at loan settlement. Title fees also include service fees for providing title and escrow services related to fractional equity sales, see below.
Fractional Equity Revenues, Related Party
The Company receives a transaction fee of 3.5% of the amount of equity sold by homeowners to TYTL for customer service, transaction processing and platform support. Revenue is recognized at a point in time when the closing occurs between TYTL and the homeowner.
Other Revenues
The Company receives a consulting fee related to certain agreed upon services provided to TYTL, a related party. Revenue is recognized on a monthly basis as the services are performed. Other revenues also include fees received from a marketing partner and software subscription fees.
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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. 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.
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. See also Part II, Item 9A – Controls and Procedures contained in our Annual Report on Form 10-K for the fiscal year ended December 31, 2025.
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 not effective as of September 30, 2026.
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, 2026, that materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
PART II: OTHER INFORMATION
ITEM 1 – LEGAL PROCEEDINGS
From time to time, the Company is a party to, or otherwise involved in, legal proceedings arising in the normal course of business. As of the date of this Report, 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.
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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, including Beeline Loans, a subsidiary of the Company. On February 23, 2026, the plaintiffs filed an amended complaint removing 17 defendants, adding new named plaintiffs and adding additional description of Optimal Blue’s products to the complaint. Beeline Loans remains a defendant in the amended complaint. The Joint Defense Group (including Beeline Loans, Inc.) filed a Motion to Dismiss which is under review of the Court. 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, 2026, no director or officer
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 13, 2011 (File No. 333-177918) and incorporated by reference herein. | |
| 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, 2014 and incorporated by reference herein. | |
| 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. | |
| 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. | |
| 3.5 | Certificate of Amendment of Articles of Incorporation, filed as Exhibit 3.1 to the Company’s Current Report on Form 8-K/A filed on August 31, 2021 and incorporated by reference herein. | |
| 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. |
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| 3.6(a) | Certificate of Amendment to 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 January 30, 2026 and incorporated herein by reference. | |
| 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. | |
| 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. | |
| 3.9 | Certificate of Designation of Series C Preferred Stock, filed as Exhibit 3-a to the Company’s Current Report on Form 8-K filed on September 29, 2023 and incorporated herein by reference. | |
| 3.10 | Certificate of Amendment of Articles of Incorporation - filed on January 2, 2024, filed as Exhibit 3-a to the Company’s Current Report on Form 8-K filed on January 4, 2024 and incorporated herein by reference. | |
| 3.11 | 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. | |
| 3.11(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. | |
| 3.12 | 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. | |
| 3.12(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. | |
| 3.13 | 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. | |
| 3.13(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. | |
| 3.13(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. | |
| 3.13(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. | |
| 3.13(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. | |
| 3.14 | 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. | |
| 3.15 | 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. | |
| 3.16 | Amended and Restated Bylaws of the Registrant, filed as Exhibit 3.1 to the Current Report on Form 8-K filed on December 30, 2025 and incorporated by reference herein. | |
| 4.1 | Form of Placement Agent Warrant, filed as Exhibit 4.1 to the Current Report on From 8-K filed on November 12, 2025 and incorporated herein by reference. | |
| 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. | |
| 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. | |
| 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. | |
| 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. | |
| 10.5 | 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. | |
| 10.6 | 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. | |
| 10.7 | 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. |
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| 10.8 | 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. | |
| 10.9 | 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. | |
| 10.10 | 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. | |
| 10.11 | 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. | |
| 10.12 | 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. | |
| 10.13 | Form of Securities Purchase Agreement, filed as Exhibit 10.1 to the Current Report on Form 8-K filed on November 12, 2025 and incorporated by reference herein. | |
| 10.14 | Form of Placement Agency Agreement, filed as Exhibit 10.2 to the Current Report on Form 8-K filed on November 12, 2025 and incorporated by reference herein. | |
| 10.15 | Form of Letter Agreement, filed as Exhibit 10.1 to the Current Report on Form 8-K filed on January 30, 2026 and incorporated by reference herein. | |
| 10.16 # | Amended and Restated 2025 Equity Incentive Plan, filed as Exhibit 10.5 to the Quarterly Report on Form 10-Q filed on November 13, 2025 and incorporated herein by reference. | |
| 10.17 | Form of Securities Exchange Agreement, filed as Exhibit 10.1 to the Current Report on Form 8-K filed on July 2, 2026 and incorporated by reference herein. | |
| 10.18 | Letter of Intent, filed as Exhibit 10.1 to the Current Report on Form 8-K filed on August 3, 2026 and incorporated by reference herein. | |
| 10.19 | Promissory Note dated July 31, 2026, filed as Exhibit 10.19 to the Quarterly Report on Form 10-Q filed on August 14, 2026 and incorporated herein by reference. | |
| 10.20 | Convertible Promissory Note dated August 12, 2026, filed as Exhibit 10.20 to the Quarterly Report on Form 10-Q filed on August 14, 2026 and incorporated herein by reference. | |
| 31.1 * | Certification of Chief Executive Officer pursuant to Rule 13a-14(a). | |
| 31.2 * | Certification of Chief Financial Officer pursuant to Rule 13a-14(a). | |
| 32.1 ** | Certification of Chief Executive Office pursuant to 18 U.S.C. Section 1350. | |
| 32.2 ** | Certification of Chief Financial Officer pursuant to 18 U.S.C. Section 1350. | |
| 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. |
| 54 |
SIGNATURES
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. | ||
| Date: November 12, 2026 | By: | /s/ Nicholas R. Liuzza, Jr. |
| Nicholas R. Liuzza, Jr. | ||
| Chief Executive Officer | ||
| Date: November 12, 2026 | By: | /s/ Christopher R. Moe |
| Christopher R. Moe | ||
| Chief Financial Officer | ||
| (Principal Financial Officer) | ||
| Date: November 12, 2026 | By: | /s/ Tiffany Milton |
| Tiffany Milton | ||
| Chief Accounting Officer | ||
| (Principal Accounting Officer) | ||
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