SECURED CREDIT FACILIITES

12 Months Ended

Dec. 31, 2024

Secured Credit Faciliites

SECURED CREDIT FACILIITES

16. SECURED CREDIT FACILIITES

Secured credit facilities consisted of the following as of December 31:

(Dollars in thousands)	2024			2023
Purchase agreement	$	1,938		$	-
Side letter		448			-
2024 secured notes		-			-
Note purchase agreement		-			-
6% Secured convertible promissory notes		-			399
Total		2,386			399
Accrued interest		-			10
Debt discount		(1,073	)		(67	)
Total secured credit facilities, net	$	1,313		$	342

Purchase Agreement

On November 14, 2024, the Company sold $1.9 million in aggregate principal amount of Senior Secured Notes (the “Notes”) and Pre-Funded Warrants to purchase a total of 36,360 shares of common stock (the “Warrants”) for total net proceeds of $1.6 million in a private placement offering (the “Offering”). As of December 31, 2024, debt issuance costs were $0.7 million.

The Notes have a maturity date of 120 days from issuance, were issued with a 20% original issue discount and do not bear interest unless and until one or more of the customary events of default set forth therein occurs, whereupon each Note will bear interest at a rate of 18% per annum. If the Note remains outstanding as of May 14, 2025, the Note also requires a special one-time interest payment of 30% which will increase the principal of each Note accordingly. Upon the occurrence of an event of default, each Investor also has the right to require the Company to pay all or any portion of the Note at a 25% premium. Further, the Company is required to prepay the Notes in connection with certain sales of securities or assets at each Investor’s election in an amount equal to 35% of the gross proceeds from such sales. The Company also has the right to prepay all, but not less than all, of the outstanding amounts under the Notes, at its election. The Notes contain certain restrictive covenants, including covenants precluding the Company and its subsidiaries from incurring indebtedness, transferring assets, changing the nature of its business, and engaging in certain other actions, subject to certain exceptions.

The Company also entered in three forms of side letters with the Investors which (i) permitted one Investor which along with an affiliate invested $0.4 million to exchange that amount of stated value of shares of Series F Preferred Stock for a $0.4 million 120-day promissory note to another affiliate, which note was issued immediately prior to the closing of the Offering and has substantially identical terms to the Notes issued therein, except it is subordinated with respect to its security interest, (ii) permit two Investors to convert Series D Preferred Stock beginning on April 7, 2025, and (iii) permit two Investors to receive a number of shares of Series F equal to 50% of their investment amount, or $0.1 million each, using the stated value of the Series F Preferred Stock, which is $0.50 per share, to determine the number of shares of Series F Preferred Stock. As of December 31, 2024, debt issuance costs related to the side letters were $0.4 million. The exchange of Series F Preferred Stock for a 120-day promissory note resulted in a gain of $44,833, which is included in gain on extinguishment of debt in the consolidated statements of operations.

In March 2025, the Company and certain of the holders agreed to an extension of the maturity date to April 14, 2025 in exchange for an increase to the principal of the notes by 10%, and two lenders were each paid their principal balance plus 2.5% interest of $0.3 million. On April 14, 2025, the Company and the remaining Note holders entered into an agreement for a second extension of the maturity dates of the Notes held by such holders to May 14, 2025. The terms of the recent extension are as follows: (i) if the Notes are paid off on or before April 29, 2025, then there will be no additional principal payment required; and (ii) if the principal of the applicable Notes are not paid off on or before April 29, 2025 but are paid on or before May 13, 2025, then an additional payment in an amount equal to 5% of the outstanding principal of the applicable Notes will be due. See Note 25 - Subsequent Events.

Beeline Holdings, Inc.

Notes to Consolidated Financial Statements

December 31, 2024 and 2023

2024 Secured Notes

On May 15, 2024, Eastside entered into a Loan Agreement with the SPV, Aegis, Bigger, District 2, and LDI.

Pursuant to the Loan Agreement, Bigger, District 2 and LDI purchased from Eastside for $1.1 million cash promissory notes in the aggregate principal amount of $1.1 million (the “2024 Secured Notes”). The 2024 Secured Notes may be satisfied by payment of 110% of principal on or before November 29, 2024, by payment of 130% of principal on or before March 30, 2025 or by payment of 140% of principal on March 31, 2025.

With each 2024 Secured Note, Eastside issued Warrants to purchase a share of Eastside’s common stock for $50.00 exercisable for five years after December 2, 2024 if on November 29, 2024 the 2024 Secured Note issued to the Warrant-holder remained unsatisfied. LDI received a Warrant to purchase 59,802 shares and each of Bigger and District 2 received a Warrant to purchase 29,901 shares resulting in a debt discount of $0.3 million, which were subsequently forgiven as part of the Debt Exchange Agreement and recorded to troubled debt restructuring in the consolidated statements of operations.

The Loan Agreement provided that if the 2024 Secured Notes had not been satisfied by November 29, 2024, then until March 31, 2025 each of the Subscribers would have the right to purchase a “Kicker Note” in the amount of $0.5 million for LDI or $0.3 million for each of Bigger and District 2 by surrendering debt or equity instruments specified in the Loan Agreement. The Kicker Notes did not bear interest, and could be satisfied by payment of their principal amounts on or before March 31, 2026.

Eastside’s obligations under the 2024 Secured Notes and the Kicker Notes (collectively, the “2024 Notes”) were secured by Eastside’s pledge of its assets, subject to certain specified exceptions. In connection with the Loan Agreement, Eastside, Aegis, Bigger and District 2 amended and restated the Intercreditor Agreement they had executed on September 29, 2023. In the Amended and Restated Intercreditor Agreement, Aegis, Bigger and District 2 subordinate their liens on any barrels of spirits owned by Eastside, and the parties agree that the net proceeds of any sale of barrels will be paid to the Subscribers in satisfaction of the 2024 Notes. Commencing when all barrels have been sold, the lien of the Subscribers under the 2024 Notes would become pari passu with the senior lien on the remaining collateral.

Subsequently in 2024, these notes were exchanged as part of the Debt Exchange Agreement, further described above in Note 5 - Debt Exchange Agreement.

Beeline Holdings, Inc.

Notes to Consolidated Financial Statements

December 31, 2024 and 2023

6% Secured Convertible Promissory Notes

On April 19, 2021, Eastside entered into a securities purchase agreement (“Purchase Agreement”) with accredited investors (“Subscribers”) for their purchase of up to $3.3 million of principal amount of 6% secured convertible promissory notes of Eastside (“Note” or “Notes”), which notes were convertible into shares (“Conversion Shares”) of Eastside’s common stock, par value $0.0001 per share pursuant to the terms and conditions set forth in the Notes with an initial conversion price of $440.00. In connection with the purchase of such Notes, each Subscriber received a warrant (“Existing Warrant”), to purchase a number of shares of common stock (“Warrant Shares”) equal to 60% of the principal amount of any Note issued to such Subscriber divided by the conversion price of the Note issued to such Subscriber, at an exercise price equal to $520.00. In connection with the Purchase Agreement, Eastside entered into a Security Agreement under which it granted the Subscribers a security interest in certain assets of Eastside (the “Security Agreement”) and a Registration Rights Agreement under which Eastside agreed to register for resale the Conversion Shares and the Warrant Shares. Concurrently therewith, Eastside and the investors closed $3.3 million of the private offering.

Roth Capital, LLC acted as placement agent in the private offering, and Eastside paid the Placement Agent a cash fee of five percent (5%) of the gross proceeds therefrom. Eastside received $3.1 million in net proceeds from the closing, after deducting the fee payable to the Placement Agent and the legal fees of the Subscribers in connection with the transaction. Eastside used the proceeds to repay prior outstanding notes payable and for working capital and general corporate purposes.

Interest on the Notes accrued at a rate of 6% per annum and was payable either in cash or in shares of Eastside’s common stock at the conversion price in the Note on each of the six and twelve month anniversaries of the issuance date and on the maturity date of October 18, 2022.

All amounts due under the Notes are convertible at any time after the issuance date, in whole or in part (subject to rounding for fractional shares), at the option of the holders into Eastside’s common stock at a fixed conversion price, which is subject to adjustment as summarized below. The Notes were initially convertible into Eastside’s common stock at an initial fixed conversion price of $440.00 per share. This conversion price is subject to adjustment for stock splits, combinations, or similar events, among other adjustments. On April 1, 2022, Eastside and the holders agreed to a reduction of the conversion price of the 6% secured convertible promissory notes to $260.00 per share in connection with Eastside’s issuance of a common stock purchase warrant to TQLA covering its loan amount of $3.5 million with a common stock value of $240.00 per share.

The Notes contained customary triggering events including but not limited to: (i) failure to make payments when due under the Notes; and (ii) bankruptcy or insolvency of Eastside. If a triggering event occurs, each holder may require Eastside to redeem all or any portion of the Notes (including all accrued and unpaid interest thereon), in cash.

The Notes are secured by a subordinated security interest in Eastside’s assets pursuant to the terms of a Security Agreement entered into between Eastside and the Subscribers.

On October 13, 2022, Eastside entered into an Amendment Agreement with the holders of the 6% Secured Convertible Promissory Notes. The Amendment Agreement changed the Maturity Date of the Notes from October 18, 2022 to November 18, 2022. In consideration of the extension, Eastside issued 481 shares of its common stock to each of the Subscribers.

On September 29, 2023, Eastside entered into a Debt Satisfaction Agreement with the Subscribers and other creditors, pursuant to which the Maturity Date of the Notes was extended from November 18, 2022 to March 31, 2025 and interest accrues at 9% per annum. Principal and interest on the Notes of $3.3 million was exchanged for equity issued to the SPV, in which the Subscribers held a 50% ownership interest, and the Notes were then amended and restated. See Note 19 - Stockholders’ Equity: 2023 Debt Satisfaction Agreement. Subsequently in 2024, these notes were further converted or exchanged as part of the Debt Exchange Agreement, further described above in Note 5 - Debt Exchange Agreement.