Eastside Distilling(US:EAST)2025-11-14 21:07Mergers and Acquisitions - The Company completed a merger with Bridgetown Spirits Corp. and Beeline Financial Holdings on October 7, 2024, and subsequently changed its name to Beeline Holdings, Inc. on March 12, 2025[245]. - The Company entered into a Debt Exchange Agreement on September 4, 2024, resulting in the assignment of 720 barrels of spirits to Craft C+P, which was later merged into a limited liability company owned by certain creditors[247]. Business Operations - Beeline Loans operates as a digital mortgage lender specializing in conventional and non-conforming residential first-lien mortgages, with a focus on providing a seamless digital experience[254]. - The Company has invested significantly in its platform to leverage mortgage origination opportunities, despite lower volumes compared to 2020 and 2021 due to fluctuating interest rates[262]. - Beeline Labs launched BlinkQC, a SaaS platform for automating pre-close quality control reviews, with expected gross margins of approximately 50%[265][266]. - Beeline Title closed a fractional sale of home real estate transaction funded through cryptocurrency on June 25, 2025, marking a milestone in blockchain-driven real estate finance[269]. - The Company completed its first round of blockchain-recorded transactions through the BeelineEQUITY platform in October 2025, closing six transactions with an additional 25 expected to close later in 2025[270]. - Beeline Loans receives 3.5% of the amount of equity sold through the BeelineEQUITY platform, which is marketed via its website[270]. - The Company aims to enhance customer acquisition and retention through technological innovation and a competitive digital mortgage experience[258][259]. Financial Performance - For the three months ended September 30, 2025, total net revenues were $2.3 million, compared to $0 for the same period in 2024[278]. - Beeline Loans originated $43.3 million in residential mortgage loans for the three months ended September 30, 2025, with net revenues of $2.0 million[286]. - Beeline Title Holdings reported net revenues of $0.4 million for the three months ended September 30, 2025, with a net loss of $0.1 million[295]. - The net loss from continuing operations for the three months ended September 30, 2025, was $3.6 million, an increase from $0.8 million in the same period of 2024[278]. - The Company will amortize $15.2 million over five years and $0.4 million over four years due to the Merger, resulting in non-cash amortization of $0.8 million each quarter[275]. - Interest expense for the three months ended September 30, 2025, was $0.1 million, compared to $0.4 million for the same period in 2024[279]. - Compensation, commissions, and benefits for Beeline Loans were $0.9 million for the three months ended September 30, 2025[292]. - Total operating expenses for Beeline Loans were $3.2 million for the three months ended September 30, 2025[286]. - Title fees for Beeline Title Holdings were $0.4 million for the three months ended September 30, 2025[297]. - The Company recorded a deemed dividend related to price protection of $0 for the three months ended September 30, 2025[281]. - For the three months ended September 30, 2025, the net loss increased to $2.3 million compared to $0.8 million for the same period in 2024, reflecting the inclusion of Beeline's results[300]. - Total operating expenses for the nine months ended September 30, 2025, were $6.4 million, up from $1.1 million in 2024, driven by increased compensation and benefits as well as general and administrative expenses[300]. - Compensation and benefits for the nine months ended September 30, 2025, were $2.6 million, compared to $0.5 million for the same period in 2024, indicating a significant increase[301]. - General and administrative expenses rose to $3.5 million for the nine months ended September 30, 2025, from $0.6 million in 2024, primarily due to public company costs and professional fees[302]. - Net cash used in operating activities of continuing operations increased to $12.1 million for the nine months ended September 30, 2025, from $1.3 million in 2024, largely due to Beeline's net loss[317]. - Net cash provided by financing activities for the nine months ended September 30, 2025, was $13.0 million, primarily from $17.0 million raised from equity transactions[319]. - The Company sold 5,694,515 shares of common stock for gross proceeds of $7.5 million during the nine months ended September 30, 2025, under the ELOC Agreement[324]. - Adjusted EBITDA for the nine months ended September 30, 2025, was $(8.4) million, compared to $(0.975) million for the same period in 2024[315]. - As of September 30, 2025, the Company had $1.3 million in cash, indicating a need for continued capital raising efforts[323]. - The Company intends to continue raising capital through equity to meet its internal cash requirements, with no assurance of securing necessary capital on favorable terms[328]. Revenue Recognition - The Company recognizes gains on the sale of mortgage loans when control over the financial assets is surrendered, typically upon acceptance and receipt of sales proceeds from the purchaser[333]. - Loan origination fees are recognized as revenue at the time the mortgage loans are funded, representing flat per-loan fee amounts[337]. - Interest income on mortgage loans held for sale is recognized from loan funding to sale, with revenue recognition discontinued when loans become 90 days delinquent[338]. Accounting Policies - The Company accounts for business combinations under ASC 805, allocating the purchase price to identifiable assets and liabilities at their estimated fair values[344]. - Goodwill is tested for impairment annually, with the Company monitoring potential impairment indicators throughout the fiscal year[346]. - The Company capitalizes certain costs incurred during the application development stage for internal-use software, amortizing these costs over five years[350]. - Stock-based compensation is recognized as an expense based on the grant-date fair value of awards, measured using the Black-Scholes valuation model[351]. - The Company holds and issues derivative financial instruments, with fair value recognized in gains on sale of loans until the loan is funded[343]. - 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[335]. - Other revenues include fees from a marketing partner embedded in the Company's point-of-sale journey for investment property customers[341].