Restatement of Financials (Tables)

12 Months Ended

Dec. 31, 2023

Beeline Financial Holdings Inc [Member]

Schedule of Error Corrections and Prior Period Adjustments

BEELINE FINANCIAL HOLDINGS, INC. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

	As of December 31, 2023
	As previously reported			Restatement adjustment			As restated
Assets
Current Assets
Cash and cash equivalents	$	190,357		$	(187,006	)	$	3,351
Restricted cash		-			187,006			187,006
Accounts Receivable, net		57,970			(57,970	)		-
Mortgage loans held for sale, at fair value		2,243,043			57,969			2,301,012
Interest rate lock derivative		-			57,505			57,505
Prepaid expenses and other current assets		82,137			-			82,137
Total Current Assets		2,573,507			57,504			2,631,011
Property and equipment, net		308,693			-			308,693
Software development costs, net		4,863,090			-			4,863,090
Right of use assets		1,643,432			-			1,643,432
Security deposit		58,181			-			58,181
Total Assets	$	9,446,903		$	57,504		$	9,504,407
Liabilities & Stockholders’ Deficit
Current Liabilities
Accounts payable	$	1,384,275		$	(35,162	)	$	1,349,112
Warehouse lines of credit		2,158,099			(980	)		2,157,119
Lease liability, current portion		323,959			-			323,959
Overdraft liability		-			35,162			35,162
Loan payable		91,999			-			91,999
Loan payable, related party		973,173			77,006			1,050,179
BDCRI loan, current portion		-			104,346			104,346
Accrued payroll		300,132			-			300,132
Escrows held for others		4,906			-			4,906
Accrued expenses and other current liabilities		9,404			19,925			29,329
Total Current Liabilities		5,245,946			200,297			5,446,243
Long Term Liabilities
Convertible notes		9,469,018			(579,757	)		8,889,261
Convertible notes - related party		9,440,428			(453,935	)		8,986,493
Accrued interest on convertible notes		-			965,378			965,378
BDCRI Loan, net		291,846			(104,346	)		187,500
Lease liability, net of current portion		1,526,825			-			1,526,825
Total Long Term Liabilities		20,728,117			(172,660	)		20,555,457
Total Liabilities		25,974,063			27,636			26,001,700
Stockholders’ Deficit
Preferred stock, $0.00001 par value, 3,282,896 shares authorized
Series A preferred stock, 172,260 shares designated, and 247,960 and 472,910 shares issued and outstanding, respectively		248			(246	)		2
Common stock, $0.00001 par value, 27,717,104 shares authorized, 1,644,040 shares issued and outstanding		1,644			(1,628	)		16
Additional paid in capital		21,772,516			501,874			22,274,390
Accumulated other comprehensive loss		(95,728	)		-			(95,728	)
Accumulated deficit		(38,205,841	)		(163,359	)		(38,369,200	)
Total Beeline Financial Holdings, Inc. stockholders’ deficit		(16,527,161	)		336,641			(16,190,520	)
Non-controlling interest		-			(306,773	)		(306,773	)
Total Stockholders’ Deficit		(16,527,161	)		29,868			(16,497,293	)
Total Liabilities & Stockholders’ Deficit	$	9,446,903		$	57,504		$	9,504,407

Beeline Financial Holdings, Inc.

Notes to Consolidated Financial Statements

December 31, 2023 and 2022

	As of December 31, 2022
	As previously reported			Restatement adjustment			As restated
Assets
Current Assets
Cash and cash equivalents	$	133,223		$	(100,510	)	$	32,713
Restricted cash		-			100,510			100,510
Accounts Receivable, net		29,595			(29,595	)		-
Mortgage loans held for sale, at fair value		2,993,374			29,595			3,022,969
Interest rate lock derivative		-			30,757			30,757
Prepaid expenses and other current assets		92,843			-			92,843
Total Current Assets		3,249,035			30,757			3,279,792
Property and equipment, net		460,069			-			460,069
Software development costs, net		5,452,197			-			5,452,197
Right of use assets		1,947,804			-			1,947,804
Security deposit		58,430			1			58,431
Total Assets	$	11,167,536		$	30,758		$	11,198,293
Liabilities & Stockholders’ Deficit
Current Liabilities
Accounts payable	$	1,236,957		$	1,412		$	1,238,369
Warehouse lines of credit		3,060,923			-			3,060,923
Lease liability, current portion		309,167			-			309,167
Loan payable		100,000			-			100,000
Promissory note		112,500			-			112,500
BDC loan, current portion		-			109,005			109,005
Accrued payroll		412,391			-			412,391
Escrows held for others		22,195			-			22,195
Accrued expenses and other current liabilities		5,767			48,386			54,153
Total Current Liabilities		5,259,901			158,803			5,418,704
Long Term Liabilities
Convertible notes		852,643			(107,405	)		745,238
Convertible notes - related party		2,985,148			615,852			3,601,000
Accrued interest on convertible notes		-			77,883			77,883
BDC Loan, net		363,351			(109,005	)		254,346
Lease liability, net of current portion		1,850,784			-			1,850,784
Total Long Term Liabilities		6,051,927			477,325			6,529,251
Total Liabilities		11,311,828			636,128			11,947,955
Stockholders’ Deficit
Preferred stock, $0.00001 par value
Series A preferred stock		269			(264	)		5
Common stock, $0.00001 par value		1,644			-			16
Additional paid in capital		27,866,976			(760,572	)		27,106,404
Accumulated other comprehensive loss		(79,836	)		-			(79,836	)
Accumulated deficit		(27,933,345	)		304,628			(27,628,717	)
Total Beeline Financial Holdings, Inc. stockholders’ deficit		(144,292	)		(457,836	)		(602,128	)
Non-controlling interest		-			(147,534	)		(147,534	)
Total Stockholders’ Deficit		(144,292	)		(605,370	)		(749,662	)
Total Liabilities & Stockholders’ Deficit	$	11,167,536		$	30,758		$	11,198,293

Beeline Financial Holdings, Inc.

Notes to Consolidated Financial Statements

December 31, 2023 and 2022

BEELINE FINANCIAL HOLDINGS, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME/LOSS

	For the Year Ended December 31, 2023
Revenues	As previously reported			Restatement adjustment			As restated
Gain on sale of loans, net	$	2,948,791		$	25,745		$	2,974,536
Interest income		(47,588	)		179,885			132,297
Interest expense		-			(179,886	)		(179,886	)
Loan origination fees		304,388			100			304,488
Title fees		558,759			1,003			559,762
Data and tech services		2,748			-			2,748
REVENUES, NET		3,767,097			26,848			3,793,946
Operating Expenses
Selling, general and administrative		496,393			(203,498	)		292,895
Salaries and benefits		6,422,175			(3,186	)		6,418,989
Payroll taxes		31,468			384,341			415,809
Professional fees		920,656			-			920,656
Marketing and advertising		1,883,622			7,506			1,891,128
Loan originating expenses		675,053			130,943			805,996
Depreciation and amortization		1,591,511			-			1,591,511
Rent and utilities		369,785			-			369,785
Computer and software		668,733			(130,844	)		537,889
Title operation expense		199,202			-			199,202
Travel and entertainment		71,976			-			71,976
Insurance expense		212,546			-			212,546
Other expenses		215,240			(215,240	)		-
Total Operating Expenses		13,758,360			(29,978	)		13,728,382
Operating Loss		(9,991,263	)		56,826			(9,934,436	)
Other (Income)/Expenses
Other (income)/expense		(295,946	)		(607	)		(296,553	)
Interest expense		569,069			684,659			1,253,728
Other taxes		8,110			-			8,110
Total Other Income/Expenses		281,233			684,052			965,285
NET LOSS	$	(10,272,496	)	$	(627,227	)	$	(10,899,722	)
Net loss of subsidiary attributable to noncontrolling interest		-			(159,239	)		(159,239	)
NET LOSS ATTRIBUTABLE TO COMMON SHAREHOLDERS		(10,272,496	)		(467,988	)		(10,740,483	)
Unrealized foreign currency translation gain (loss)		-			(15,892	)		(15,892	)
TOTAL OTHER COMPREHENSIVE INCOME (LOSS)		-			(15,892	)		(15,892	)
TOTAL COMPREHENSIVE LOSS	$	(10,272,496	)	$	(483,880	)	$	(10,756,375	)

	For the Year Ended December 31, 2022
	As previously reported			Restatement adjustment			As restated
Revenues
Gain on sale of loans, net	$	1,854,910		$	(19,132	)	$	1,835,778
Interest income		(23,946	)		249,794			225,848
Interest expense		-			(249,794	)		(249,794	)
Loan origination fees		413,209			-			413,209
Title fees		672,813			49,890			722,703
REVENUES, NET		2,916,987			30,758			2,947,744
Operating Expenses
Selling, general and administrative		-			267,563			267,563
Salaries and benefits		5,812,860			240,014			6,052,874
Payroll taxes		405,065			-			405,065
Professional fees		920,578			-			920,578
Marketing and advertising		1,776,042			12,416			1,788,458
Loan originating expenses		1,047,241			(129,275	)		917,966
Depreciation and amortization		1,161,094			-			1,161,094
Rent and utilities		620,779			-			620,779
Computer and software		922,527			(79,729	)		842,798
Title operation expense		140,951			-			140,951
Travel and entertainment		71,655			(1	)		71,654
Insurance expense		202,649			-			202,649
Other expenses		260,991			(260,991	)		-
Total Operating Expenses		13,342,430			49,997			13,392,429
Operating Loss		(10,425,443	)		(19,239	)		(10,444,685	)
Other (Income)/Expenses
Interest expense		283,187			(176,338	)		106,849
Other taxes		701			1			702
Total Other Income/Expenses		283,888			(176,337	)		107,551
NET LOSS	$	(10,709,332	)	$	157,098		$	(10,552,236	)
Net loss of subsidiary attributable to noncontrolling interest		-			(147,534	)		(147,534	)
NET LOSS ATTRIBUTABLE TO COMMON SHAREHOLDERS		(10,709,332	)		304,632			(10,404,702	)
Unrealized foreign currency translation gain (loss)		-			(70,298	)		(70,298	)
TOTAL OTHER COMPREHENSIVE INCOME (LOSS)		-			(70,298	)		(70,298	)
TOTAL COMPREHENSIVE LOSS	$	(10,709,332	)	$	234,334		$	(10,475,000	)

Beeline Financial Holdings, Inc.

Notes to Consolidated Financial Statements

December 31, 2023 and 2022

BEELINE FINANCIAL HOLDINGS, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

	For the Year Ended December 31, 2023
	As previously reported			Restatement adjustment			As restated
CASH FLOWS FROM OPERATING ACTIVITIES
Net Loss	$	(10,272,496	)	$	(627,227	)	$	(10,899,722	)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization		1,591,511			-			1,591,511
Allowance for change in fair market value		24,552			(24,552	)		-
Gain on sale mortgage loans held for sale, net of direct costs		-			(2,974,536	)		(2,974,536	)
Stock-based compensation		374,746			-			374,746
Noncash lease expense		-			(4,795	)		(4,795	)
Changes in operating assets and liabilities:
Proceeds from principal payments and sales of loans held for sale		-			59,831,839			59,831,839
Originations and purchases of mortgage loans held for sale		-			(56,135,346	)		(56,135,346	)
Derivative asset		-			(26,748	)		(26,748	)
Accounts receivable		(28,375	)		28,375			-
Loans held for sale		725,779			(725,779	)		-
Prepaid expenses and other current assets		10,706			-			10,706
Deposits		250			-			250
Accounts payable		147,317			809,593			956,910
Accrued payroll		(112,259	)		112,259			-
Right of use asset		304,371			(304,371	)		-
Escrows held		(17,289	)		17,289			-
Warehouse lines of credit, net		(902,824	)		902,824			-
Lease liability		(309,170	)		309,170			-
Promissory note		(112,500	)		112,500			-
Accrued expenses and other liabilities		3,640			(3,640	)		-
Net Cash Used in Operating Activities	$	(8,572,041	)	$	1,296,857		$	(7,275,185	)
CASH FLOWS FROM INVESTING ACTIVITIES
Purchases of software and property and equipment	$	(851,028	)	$	-		$	(851,028	)
Net Cash Used in Investing Activities	$	(851,028	)	$	-		$	(851,028	)
CASH FLOWS FROM FINANCING ACTIVITIES
Payments from BDCRI loan	$	(71,505	)	$	71,505		$	-
Net borrowings under warehouse line of credit		-			(903,804	)		(903,804	)
Repayments under notes and convertible notes payable		-			(222,500	)		(222,500	)
Proceeds from convertible notes issued		3,940,403			1,189,069			5,129,472
Proceeds from convertible notes issued - related party		4,662,026			(465,955	)		4,196,071
Proceeds from demand notes		153,454			(153,454	)		-
Proceeds from demand notes - related party		811,718			(811,718	)		-
Net Cash Provided by Financing Activities	$	9,496,096		$	(1,296,857	)	$	8,199,239
Effect of exchange rate changes on cash	$	(15,892	)	$	-		$	(15,892	)
Net increase (decrease) in cash		57,134			-			57,134
Cash and cash equivalents - beginning of year		133,223			-			133,223
Cash and cash equivalents - end of year	$	190,357		$	-		$	190,357

	For the Year Ended December 31, 2022
CASH FLOWS FROM OPERATING ACTIVITIES	As previously reported			Restatement adjustment			As restated
Net Loss	$	(10,709,332	)	$	157,098		$	(10,552,236	)
Adjustments to reconcile net loss to net cash provided by (used in) operating activities:
Allowance for gain/loss on loans held for sale		111,216			111,216			-
Depreciation and amortization		1,161,094			-			1,161,094
Gain on sale mortgage loans held for sale, net of direct costs		-			(1,835,778	)		(1,835,778	)
Stock-based compensation		364,191			-			364,191
Noncash lease expense		-			(276,113	)		(276,113	)
Changes in operating assets and liabilities:
Proceeds from principal payments and sales of loans held for sale		-			132,474,641			132,474,641
Originations and purchases of mortgage loans held for sale		-			(122,263,204	)		(122,263,204	)
Accounts receivable		200,452			79,833			280,285
Derivative asset		-			(30,757	)		(30,757	)
Loans held for sale		8,294,039			(8,294,039	)		-
Prepaid expenses and other current assets		266,443			(57,335	)		209,108
Deposits		254,276			1,132			255,408
Accounts payable		330,123			(52,727	)		(277,396	)
Promissory note issued for lease cancellation		-			225,000			225,000
Accrued payroll		(96,159	)		96,159			-
Right of use asset		(1,947,804	)		1,947,804			-
Escrows held		(30,524	)		30,524			-
Warehouse lines of credit, net		(8,237,999	)		8,237,999			-
Deferred rent		(641,627	)		641,627			-
Lease liability		2,159,951			(2,159,951	)		-
Other changes		145,691			(145,691	)		-
Accrued expenses and other liabilities		(60,908	)		60,908			-
Net Cash Provided by (Used in) Operating Activities	$	(8,436,877	)	$	8,948,344		$	289,035
CASH FLOWS FROM INVESTING ACTIVITIES
Purchase of property and equipment		(26	)		26			-
Purchases of software and property and equipment		(1,914,772	)		(1	)		(1,914,773	)
Net Cash Used in Investing Activities	$	(1,914,798	)	$	25		$	(1,914,773	)
CASH FLOWS FROM FINANCING ACTIVITIES
Payments from BDCRI loan		(71,575	)		71,575			-
Net borrowings under warehouse line of credit		-			(8,237,999	)		(8,237,999	)
Net borrowings under operating lines of credit		-			(1,025	)		(1,025	)
Repayments under notes and convertible notes payable		-			(225,000	)		(225,000	)
Proceeds from promissory note		225,000			(225,000	)		-
Repayment of promissory note		(112,500	)		112,500			-
Series A warrants exercised		4,711,476			(4,711,476	)		-
Proceeds from convertible notes issued		852,642			(120,030	)		732,612
Proceeds from convertible notes issued - related party		2,985,148			615,852			3,601,000
Proceeds from the issuance of preferred stock upon warrant exercises		-			4,711,476			4,711,476
Amortization of debt discount		254,223			(254,223	)		-
2022 warrants issued		169,442			(169,442	)		-
2022 warrants issued - related party		593,226			(593,226	)		-
Repayments of demand notes - related party		(700,000	)		-			(700,000	)
Proceeds from corporation note		100,000			(100,000	)		-
Net Cash Provided by (Used in) Financing Activities	$	9,007,082		$	(9,126,018	)	$	(118,936	)
Effect of exchange rate changes on cash	$	70,298		$	(140,596	)		(70,298	)
Net decrease in cash		(1,274,295	)		(540,675	)		(1,814,972	)
Cash and cash equivalents - beginning of year		1,407,520			540,675		$	1,948,195
Cash and cash equivalents - end of year	$	133,223		$	-		$	133,223