Beeline Holdings, Inc.

Beeline Holdings, Inc. (the “Company”) was incorporated under the laws of Nevada in 2004. On March 12, 2025, the Company changed its name from Eastside Distilling, Inc. (“Eastside”) to Beeline Holdings, Inc., reflecting the Company’s current operations and focus as a fintech mortgage lender, fractional equity purchase facilitator and title provider.

Merger

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

Beeline Financial was incorporated in Delaware on July 1, 2020 and is the successor to a Rhode Island corporation organized in 2018. Beeline Financial is an AI-driven fintech mortgage lender that develops proprietary software in the form of major enhancements and new developments in its lending platform and introduced its AI-powered Chatbot (“Chatbot”) “Bob” in July 2023.

Debt Exchange Agreement

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

Subsequent to the execution of the Debt Exchange Agreement, Eastside organized a subsidiary, Bridgetown Spirits Corp. (“Bridgetown Spirits”) and was assigned Eastside’s spirits business to Bridgetown Spirits. On July 25, 2025, the Company disposed of its 53% interest in Bridgetown Spirits in exchange for the satisfaction of debt, and as a result, Bridgetown Spirits is no longer a subsidiary of the Company*.*

Overview and History

The Company is a fintech mortgage lender, fractional real estate equity purchase facilitator and title provider transforming the home ownership process into a shorter, easier path than conventional mortgage lending 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 to create a better outcome for its customers. Beeline was founded in 2019 with its principal office located in Providence, Rhode Island. An Australian subsidiary has an office in Burleigh Heads, Australia. The Company also has executive office suites in multiple locations across the United States.

The Company’s business model is focused on providing an efficient process for consumers to more easily access mortgage lending and financing using our online portal and services. In 2025, approximately 73% of the Company’s loans originated and brokered through December 31, 2025, were Non-QM loans where the prospective borrower lacked traditional income from full-time employment in contrast to investment, rental or consulting income or other 1099 income or where the consumer has sufficient assets to support the loan.

The Company primarily serves as the lender for its conventional loans, where it is also fully responsible for the underwriting. The Company is the lender on a non-delegated underwriting basis on most of its Non-QM loans and also serves as a mortgage broker for certain loans with third party lenders - primarily for the remainder of Non-QM loans. In 2025, the Company acted as lender in 73% of its loan transactions, and as mortgage broker in 27% of its loan transactions. The Company leverages its industry-specific knowledge and infrastructure, using a combination of licensed and proprietary technology, to provide an alternative to a more manual, slower and non-technology focused lending process for residential properties in the United States.

Mortgage Lending Business

The Company is licensed to operate in 29 states including California, Florida and Texas. The Company’s services and platform are designed to address the evolving US real estate market, including the increasing use of online and digital means of financing home purchases as well as a trend away from conventional lending qualification practices, in part by placing consumers in front of financing opportunities that may not be available from lenders using the conventional approach to loan qualification. Its focus is on residential properties.

The Company can generate mortgage approvals that are more reliable than traditional pre-approvals in as little as 7 to 10 minutes. The Company’s unique customer experience was built for digital-first consumers, especially property investors and those who work in the gig economy or are self-employed and who desire a frictionless, digital experience. The Company offers a unique variety of mortgage products when compared to other mortgage lenders, including the “top 50” lenders, allowing borrowers a higher probability of finding a home financing solution that meets their unique situation.

Most top 50 lenders will deny a borrower if they are not approved for a conventional mortgage backed by Freddie Mac or Fannie Mae, the two government-sponsored enterprises (“GSEs”) that back a majority of mortgages in the U.S. (“QM loans”) or FHA or VA loan options. In this instance, the Company will re-route the borrower to a non-traditional mortgage process offering solutions not offered by larger lending institutions. Combining QM loans and Non-QM loans through a single streamlined platform available any time provides strong differentiation and provides additional options for the Company’s customers.

As the U.S. real estate industry has evolved, Non-QM loans have become more popular, relying on a different set of underwriting criteria which are more suited to borrowers whose situations do not line up with more stringent guidelines created for and based on the previous generations and less flexible economy. The Company is one of the few direct-to-consumer digital mortgage lenders that offer both QM loans and Non-QM loans from a single platform, allowing the Company to better serve the 74 million Millennials and 71 million Gen Z who have emerged as home buyers (or soon will) and currently representing approximately 32% of the home purchase market. In 2025, 30% of the Company’s loan originations were home purchases, and 70% were refinance transactions.

As described elsewhere in this Report, the Company’s business is multi-faceted, and can serve multiple roles in the home lending process. In addition to the lending operation, the Company also has a title agency. The Company has a minority investment in a subsidiary focused on the development of AI sales tools that the Company’s lending operation seamlessly inserts in text chat on its website.

The Company breaks down the legacy role-based mortgage process into tasks for faster processing. and has built automation to satisfy underwriting conditions in the loan file in real time. This expedites the time to close while minimizing headcount and other expenses. The Company expects that its technology and systems will continue to evolve, providing an opportunity for growth over the next three to five years. However, there are no assurances that it will grow during this period.

Services

The Company is a digital consumer real estate financing company leveraging proprietary AI, streamlined task-based processing, data integrations and human capital for originating, evaluating, approving and closing a mortgage, fractional equity purchase or title insurance.

Sources of Revenue

The Company generates revenue from three key sources, listed below:

Beeline Labs

Beeline Labs, Inc. (“Beeline Labs”), a subsidiary of Beeline Financial, specializes in developing and licensing proprietary software for mortgage lenders. In July 2025, Beeline Labs launched BlinkQC, a SaaS platform designed to automate pre-close quality control (or QC), reviews for mortgage loan files. Beeline Loans uses BlinkQC in its own operation for its pre-close QC. Later in 2026, Beeline Labs plans to license BlinkQC to other mortgage companies. BlinkQC uses artificial intelligence to ingest loan document packages, extract and validate data, apply customizable rule sets, and generate compliance reports. Critical data points are being collected from the Beeline Labs launch and integrations are set to start in late 2026, opening BlinkQC up to over 1,000 Banks and Independent Mortgage Banks. The Beeline Labs data and integrations are essential for a broader launch.

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

BeelineEquity

On June 25, 2025, Beeline Title facilitated the closing of what it believes to be one of the first-ever fractional sale of home real estate with TYTL who will fund these transactions through the sale of a crypto token which is backed by real property. The Company’s Chief Executive Officer is a co-founder and principal stockholder of TYTL. In addition, Christopher Moe, the Company’s Chief Financial Officer, and Joseph Freedman, a director, are each TYTL shareholders. While neither the Company, nor its subsidiaries, mints or receives the token, Beeline Title handles the settlement and title portions of these transactions for TYTL who is minting the token. In the fourth quarter of 2025, Beeline Loans began providing customer acquisition services and support to TYTL who mints the token and offers the equity exchange transaction. The Company receives 3.5% in cash of the value of equity sold and markets the product through its website as BeelineEquity.

Beeline Title will provide the title and closing services for each transaction. Importantly, Beeline Title will open this platform to all mortgage lenders, giving them access to a proven solution for cryptocurrency token transaction reconciliation, compliance, and disbursement. As cryptocurrency adoption accelerates and becomes regulated by federal and state governments, the Company is positioning itself as a leader in this fast-moving ecosystem, offering trusted infrastructure to help lenders scale into a future where crypto and compliance go hand-in-hand.

Marketing

The Company generates the majority of its leads through online channels. In 2025, Google advertising accounted for approximately 49.5% of total leads. The next largest paid source, LendingTree, accounted for approximately 8.4% of total leads. In total, the Company purchased paid leads from 11 advertising platforms and lead aggregators during 2025. The Company also received leads from additional sources, including phone calls, email, SMS, organic search, and direct traffic. As a result, the Company may be subject to concentration risk related to changes in pricing, availability, or performance of its primary lead sources. See “Item 1A. Risk Factors.”

The Company’s marketing strategy plays an important role in supporting its growth, focusing on customer acquisition, return on investment, and customer satisfaction. Through targeted campaigns, the Company attracts new customers and explores product and audience segments. The marketing team’s analysis of customer value, along with return on ad spend, supports strategic planning and resource allocation. Predictive models are used to estimate customer lifetime value and inform campaign planning. These models rely on historical data and assumptions and may not accurately predict future performance.

Measurement, reporting, and attribution methods provide the foundation for assessing campaign performance and informing marketing spend decisions. The Company often experiments with new traffic sources and campaign types to maintain an agile marketing strategy. Through consistent communication of its value propositions, the marketing team supports customer engagement. The Company also focuses on improving the customer experience across digital touchpoints. Attribution models are subject to limitations inherent in multi-channel customer journeys.

The Company’s marketing team operates within four primary pillars: Customer Acquisition, Marketing Data, Marketing Communications, and Product, each contributing uniquely to its overall growth strategy:

Customer Acquisition: As the Company’s 2025 lead generation reflects, it relies heavily on Google advertising, with additional lead volume sourced from multiple other advertising platforms and lead aggregators. To support future growth, the Company may seek to reduce this dependency by developing other material lead sources. Acquisition efforts focus on managing advertising budgets efficiently, allocating resources strategically, and tracking return on ad spend.

Marketing Data: Marketing data is central to the Company’s decision-making process. Regular performance reviews provide insights into advertising effectiveness; while reporting and analytic tools generate insights that guide strategy. Internal attribution models support tracking and analysis of the customer journey, which helps inform budget allocation. These analyses support management decision-making but are subject to data quality and modeling limitations. Forecasting models assist the Company in anticipating long-term customer value. The Company also gathers competitive intelligence to monitor industry trends.

Marketing Communications: The Company uses automated, periodic email and SMS communications to nurture potential leads and support conversion efforts. Targeted automated communications are deployed at various points in the customer lifecycle to increase engagement. The Company maintains an active presence across social media platforms to support brand awareness and customer engagement. AI-driven content creation supports scalable messaging across channels. These efforts are intended to support the Company’s value propositions, brand awareness, and engagement with current and prospective customers. The Company periodically offers promotions and incentives designed to attract new customers and encourage repeat engagement.

Product: The Company focuses on optimizing the customer experience through conversion rate improvements, user experience enhancements, and tailored landing pages. Ongoing product testing is conducted to align updates with customer needs, and data-driven and automated solutions are being developed to support more personalized experiences. Not all product initiatives result in improved performance, and some experiments may not achieve their intended outcomes.

Intellectual property

The Company primarily relies upon a combination of trade secrets, service marks and technology licensing, as described below.

Competition

Banks and other savings institutions (depositories) have historically dominated the mortgage lending business. Their competitive advantages are financial strength, which includes the availability of low-cost capital to fund loans, management and employee skills, experience and availability, the ability to use their financial strength to leverage compliance costs and local visibility. Because of policy changes and shifts in the marketplace, independent mortgage banks (“IMBs”) hold a large market share of the mortgage lending business. By 2016, nonbank mortgage origination for the first time surpassed that of the banks. The rapid rise of the nonbank mortgage lenders could have been possible only with the assistance of federal subsidies. In the decade from 2010 to 2020, nonbanks effectively doubled their market share of Fannie, Freddie, and FHA lending.

As of early 2026, IMBs continue to dominate the mortgage market, originating approximately 83% of all single-family mortgages in 2024 and maintaining a similar majority share through the first half of 2025. While banks have largely retreated from standard originations, they maintain a significant presence in the jumbo mortgage market, which saw volume reach $270.8 billion in 2024. Market forecasts for 2026 suggest a continued recovery in volume as interest rates stabilize. The Mortgage Bankers Association projects total single-family originations will reach $2.2 trillion in 2026, up from $2.0 trillion in 2025. Analysts expect 30-year fixed rates to average between 6.0% and 6.4% throughout 2026, with some optimistic forecasts dipping into the high 5% range. After eight consecutive quarters of losses ending in early 2024, IMBs returned to profitability in 2025, reporting an average pre-tax production profit of 33 basis points in Q3 2025.

Digital direct-to-consumer mortgage lending has grown rapidly, especially post-COVID, as the trend toward remote communication and digitization of the economy accelerated. As a result, many younger consumers demand a much faster, more efficient mortgage processes. Key trends include the adoption of AI and machine learning for underwriting, online document management, and personalized loan options.

The market for online mortgage lending is substantial, with projections suggesting continuous growth due to convenience, cost-efficiency, and customer demand for transparency and lower fees.

The Company’s key online competitors are:

However, as of the date of this Report, the Company does not believe that the above competitors provide Non-QM loans in any material way. The Company believes the combination of its mortgage product offerings and its focus on a digital first experience, provides it with a competitive advantage.

On the other hand, certain of its competitors have greater resources and brand recognition than the Company or otherwise pose a competitive threat to our business. See Item 1A “Risk Factors” for risks related to the competition the Company faces in its industry.

Strategy for success

The Company’s strategy is focused on developing and leveraging excellent technology to enable better scale at a reduced cost while delivering an exceptional customer experience through AI, automation and task-based workflows.

Additionally, the Company’s strategy includes the ability to keep the consumer in its ecosystem - keeping that customer for the title work and escrow/settlement services. This increases the Company’s revenue per file by an average of $1,100 and spreads customer acquisition costs over multiple revenue opportunities.

None of this is possible without a great brand and great user experience when interacting with the Company’s technology and staff. The Company’s strategy in this area is to continue to push digital content to the right audiences who are interested in a lending experience like the one it offers. When human touch points are necessary or requested, it provides the consumer with a knowledgeable, friendly and solutions-based support system.

Government Regulations

The statements in this section describe the government regulations specific to the Company’s industry and should be considered carefully in conjunction with other information contained in this Report including the “Item 1A Risk Factors”.

These statutes and regulations regulate how the Company operates, and the licenses it and its employees are required to maintain. They also dictate the education and training required by employees, disclosures that are required to be made to consumers, etc. Any changes to the regulatory structure may impact how the Company does its business.

The CFPB has undergone significant restrictions under the Trump Administration which has included massive downsizing, reduced funding and a reduced regulation focus. Ongoing litigation relating to staffing reductions remains pending. A federal district court enjoined the employee terminations which injunction was vacated by the federal appeals court. The federal appeals court heard oral arguments on a rehearing on February 24, 2026.

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.

The discussion concerning federal regulation of the mortgage lending business is subject to significant potential change as the Trump administration seeks to scale back the federal government, eliminate agencies and strengthen the President’s control over independent agencies. There has been a strong reaction with the filing of many lawsuits and for the most part lower courts have pushed back on many of President Trump’s executive orders. In February 2026, the U.S. Supreme Court struck down the President’s tariffs which he had imposed under the International Emergency Economic Powers Act, reducing the Administration’s ability to use executive powers to impose tariffs and commencing a process under which many businesses are seeking refunds from the federal government of tariffs previously paid. Ultimately, it is likely that the U.S. Supreme Court may also rule on the scope of the executive powers in other contexts, which may impact the following discussion.

Under the Dodd-Frank Act, 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 the Company’s other lines of business title insurance. The CFPB has broad supervisory and enforcement powers with regard to non-depository institutions, such as the Company, that engage in the production of home loans.

President Trump has targeted the CFPB as an agency to be eliminated or substantially reduced. 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 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 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% DTI and replaced it with pricing-based thresholds. Loans at 150 basis points or less over the 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 it 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. With the enforcement power of the CFPB at risk under the Trump administration, state regulatory agencies and state attorneys general may increase their enforcement activities in certain areas. In addition, the government-sponsored enterprises, or GSEs, the FHA, the FTC, and others subject the Company to periodic reviews and audits. This broad and extensive supervisory and enforcement oversight will continue to occur in the future. 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.

Federal Lending Laws and Regulations

Numerous U.S. federal regulatory consumer protection laws impact the Company’s business, including but not limited to:

The Company is also subject to a variety of regulatory and contractual obligations imposed by entities purchasing loans from its insurers and guarantors of the loans it produces or facilitates.

State Lending Laws and Regulations

The Company must comply with state laws and regulations, including licensing requirements and other regulations which vary by state, in order to conduct its business.

To conduct residential mortgage lending operations in the United States, the Company is licensed in 28 states and the District of Columbia including California, Florida and Texas. Its title agencies also maintain licenses to operate in certain of these states. Generally speaking, the licensing process includes the submission and approval of an application to the applicable state agency, a character and fitness review of key individuals, and an administrative review of our business operations. Such requirements occur at the initial stage of license acquisition and throughout the period of licensure.

Under the SAFE Act, all states have laws that require mortgage loan originators employed by non-depository institutions to be individually licensed to offer mortgage loan products. These licensing requirements require individual loan originators to register in a nationwide mortgage licensing system, submit application and background information to state regulators for a character and fitness review, submit to a criminal background check, complete a minimum of 20 hours of pre-licensing education, complete an annual minimum of eight hours of continuing education and successfully complete an examination.

In addition to applicable federal laws and regulations governing the Company’s operations, its ability to originate loans in any particular state is subject to that state’s laws, regulations and licensing requirements, which may differ from the laws, regulations and licensing requirements of other states. State laws often include fee limitations and disclosure and other requirements. Many states have adopted regulations that prohibit various forms of “predatory” lending and place obligations on lenders to substantiate that a customer will derive a tangible benefit from the proposed home financing transaction and/or have the ability to repay the loan. These laws have required most lenders, including the Company, to devote considerable resources to maintain automated systems to perform loan-by-loan analysis of points, fees and other factors set forth in the laws, which often vary depending on the location of the mortgaged property.

Additionally, our business is subject to numerous types of state laws that are continuously changing, including laws related to mobile-and internet-based businesses, data privacy and advertising laws, which limit how companies can use customer data, impose obligations on companies in their management of such data, and require us to modify our data processing practices and policies, which results in substantial costs and expenses in an effort to comply.

In particular, there are numerous U.S. federal and state laws and regulations regarding privacy and the collection, sharing, use, processing, disclosure, and protection of personal data. In the loan origination process, the Company obtains substantial personal data including credit reports, tax returns, social security numbers and income and asset sources, all of which must be kept confidential. Such laws and regulations often vary in scope, may be subject to differing interpretations, and may be inconsistent among different jurisdictions. Following the European Union, California became the first state to adopt a data privacy law when in June 2018 it enacted the CCPA. The CCPA requires covered companies to provide California consumers with new disclosures and will expand the rights afforded consumers regarding their data. Fines for noncompliance may be up to $7,500 per violation.

Since the CCPA was enacted, the U.S. has at least 20 states – which includes California, Colorado, Connecticut, Delaware, Florida, Indiana, Iowa, Kentucky, Maryland, Minnesota, Montana, Nebraska, New Hampshire, New Jersey, Oregon, Rhode Island, Tennessee, Texas, Utah and Virginia – that have comprehensive data privacy laws in place or are about to be effective. Other states have enacted narrower privacy laws, including Maine, Michigan, Nevada, New York, Vermont, and Washington. And other states have introduced privacy bills that address a range of issues, including protecting biometric identifiers and health data, or governing the activities of specific entities. This patchwork approach to privacy legislation could pose compliance and liability risks for companies that have multistate operations. Proposed and enacted bills in various states contemplate similar rights in preexisting privacy legislation but differ in implementation and enforcement. In addition, proposed federal legislation could further expand the regulatory framework for data privacy, data security, and other matters that impact our business at the federal level.

The costs of compliance with, and other burdens imposed by the CCPA, and similar laws may limit the use and adoption of our products and services and/or require us to incur substantial compliance costs, which could have an adverse impact on our business and our financial condition.

The Company’s compliance team strives to comply with all applicable laws and regulations relating to privacy, data security, and data protection and other activities in which it engages or is otherwise subject to in the operation of its business. However, its limited resources may adversely affect its compliance efforts. There has been increased government regulation as governments including the federal government are continuing to focus on updating laws and regulations to address the ever-evolving digital world, including through laws and regulations aimed at privacy and data security, and it is possible that new laws will be passed, or existing laws will be amended in a way that is material and adverse to the Company’s business. As regulation increases, the Company anticipates an increase in its compliance costs and a higher risk of regulatory fines or sanctions, which may be material.

The Company’s title agencies are also subject to state laws that may require licensure and prohibit, limit, or require approval to engage in certain conduct. For example, several states have implemented laws and regulations aimed at prohibiting kickbacks and other inducements associated with referrals to or from title insurance agents or corporations. In some instances, these requirements are more extensive than RESPA.

Other Laws

The Company is also subject to various other laws, including employment laws related to hiring practices, overtime, and termination of team members, health and safety laws, environmental laws and other federal, state and local laws in the jurisdictions in which it operates.

As states and possibly the federal government start to enact laws and regulations relating to AI, we will be subject to additional regulations.

BeelineEquity

Fractional home equity sales, often structured as co-ownership or investment platforms, are primarily governed by U.S. securities laws (Securities Act of 1933) if they involve passive investment income, requiring registration or exemptions like Regulation D or A+. Other regulations include state/local real estate laws, private deed restrictions, and zoning rules.

Key regulatory areas for fractional home equity sales include:

Seasonality

The consumer lending sector, particularly with regard to mortgage loan origination volumes, is shaped by broader economic factors such as interest rates, inflation, unemployment levels, home price trends, and consumer sentiment. Additionally, seasonality plays a key role in home purchasing, as home sales generally experience an uptick in the second and third quarters and see a decline in the first and fourth quarters of the calendar year. This seasonal pattern arises from homebuyers with children preferring to make purchases during the spring and summer months in order to move before the school year begins.

Refinancing mortgage loans are particularly influenced by current levels as well as expected trends in interest rates. Nevertheless, the traditional patterns of seasonality seen in the housing market were less pronounced than 2021 through 2023 largely due to rising interest rates and a tight housing supply. Although the Company continues to observe seasonal increases in purchase transactions during the spring and early summer periods and softer volumes in the winter months, the amplitude of these fluctuations remains influenced by prevailing rate volatility, home price levels, and local supply conditions.

Business Initiatives

The Company’s business initiatives include adding lending products to its current suite. This may include additional non-QM offerings, second lien offerings, VA and FHA offerings, etc.

Additionally, it anticipates expansion of its BeelineEquity product (described above).

The Company also plans to have direct seller approval with Fannie Mae and/or Freddie Mac in the second half of 2026. During this timeframe, the Company may also engage in a holistic hedging strategy to increase the revenue per file by selling loans on a mandatory basis to its investors.

To diversify revenue, the Company plans to offer SaaS products to the mortgage industry - the MagicBlocks and BlinkQC products referenced previously.

There may be time, resource or other constraints that impede the Company’s ability to execute on these initiatives which may delay them or prevent them from occurring.

Warehouse Line of Credit

In addition to traditional equity and debt financing, the Company uses three warehouse lines of credit to provide the capital for it to originate mortgage loans. Generally, warehouse lines of credit are used as interim, short-term financing which bears interest at a fixed margin over an industry index rate. The outstanding balance of the Company’s warehouse lines of credit will fluctuate based on its lending volume. The advances received under the warehouse lines of credit are based upon a percentage of the fair value or par value of the mortgage loans collateralizing the advance, depending upon the type of mortgage loan. Should the fair value of the pledged mortgage loans decline, the warehouse providers may require the Company to provide additional cash collateral or mortgage loans to maintain the required collateral level under the relevant warehouse line. The Company did not incur any significant issuance costs related to its warehouse lines of credit. Presently the Company’s three warehouse lines of credit have a total limit of $25 million. As loans are closed, the Company sells the note and mortgage and reduces the balance on its warehouse lines.

Employees

As of December 31, 2025, the Company has 84 employees. Certain of its employees serve in dual roles. Beeline also uses certain third parties who operate as independent contractors. Additionally, the Company leverages independent contractors in marketing and technology/development.