Thank you for standing by. This is the conference operator. Welcome to the Beeline Holdings, Inc. first quarter 2025 earnings conference call. As a reminder, all participants are in listen-only mode and the conference is being recorded. After the presentation, there will be an opportunity to ask questions. To join the question queue, you may press star, then 1 on your telephone keypad. Should you need assistance during the conference call, you may signal an operator by pressing star, then 0. I would now like to turn the conference over to Tiffany Milton, Chief Accounting Officer. Please go ahead.

Good evening, everyone, and thank you for joining us today to discuss Beeline's financial results for the first quarter of 2025. I'm Tiffany Milton, Beeline's Chief Accounting Officer, and joining us on today's call to discuss these results is Nick Laiusa, our CEO, Chris Moe, our CFO, Jess Kennedy, our COO, and Jeffrey Gwynn, CEO of Bridgetown Spirit. it. Following our remarks, we will open the call to your questions. Now, before we begin with prepared remarks, we submit for the record the following statement. This conference call contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, including, but not limited to, statements regarding beeline holdings, expectations for future growth, a new product we intend to roll out primarily in the third quarter expected april results the impact of existing partnerships future progress on expanding our liquidity future progress on improving cash flow and our pace of new investments forward looking statements are typically identified by words such as believe expect anticipate plan intend seek estimate will would could may continue forecast target potential project undertaken similar expressions these statements are based on management's current assumptions beliefs, and expectations, and are not guarantees of future performance. Actual results may differ materially from those described in forward-looking statements due to various risks and uncertainties. These include, without limitation, the risk factors we provided in our 2024 Form 10-K we just filed with the SEC, including risks rising from the impact of the United States tariffs on the economy and our need to raise additional capital. In addition, there is a risk that our new technologies we are developing may not work as expected. We caution investors not to place undue reliance on any forward-looking statements made during this call. All forward-looking statements speak only as of the date of this presentation and are based on information available to Beeline as of today. We undertake no obligation to publicly update or revise these statements to reflect events or circumstances occurring after today's date, except as required by law. Now, with that said, I'd like to turn the call over to Nick Laiouza. Nick, please proceed.

Good afternoon, everyone. and thank you for joining us today. I'm Nick Laiuza, co-founder and CEO of Beeline Holdings. With me is our CFO, Chris Mo. We appreciate you joining us for our first quarter 2025 earnings call. Q1 was a breakout quarter, our first as a public company and the first where we saw the full strength of our AI mortgage platform in action. While some of today's themes may sound familiar from our year-end update, it's critical to highlight how our momentum is accelerating and how Q1 has laid the groundwork for even bigger progress ahead. Beeline is a high-growth story and built to scale high volumes. An improving market will quickly fuel our growth once that market normalizes and rates come down. While market consensus suggests mortgage volumes may not rebound until late 2025 or early 2026, we're not waiting. We've positioned Beeline to grow ahead of the cycle, and our upcoming equity product is a prime example. Our appetite to grow ahead of the market has led to a significant opportunity that has been in development for some time. Starting in Q3, we'll launch a high-demand, interest rate neutral equity product designed to inject liquidity into a constrained housing market. This complements our mortgage business and may prove to be a category-defining solution. First and foremost, we are a technology mortgage and title provider focused on using AI and automation to reshape the home financing experience. Our mission is clear, to make the mortgage process simpler, faster, and more accessible for a new generation of homeowners and investors. We've achieved some meaningful milestones in Q1. We continue to outpace the industry with originations up 38% year-over-year, compared to 9% for the broader market. We see sequential improvement through the quarter, and while April numbers are still being reviewed, we believe it is our best month in more than three years, a clear signal that our model is scaling, even in a tough housing environment. In April, we surpassed $1 billion in total loan originations since inception, a major validation of our platform. We've been proactive, and as a complement to our core mortgage business, we'll begin closing beta transactions in June with the launch of our new interest rate neutral equity product, a solution that appears to have features exclusive to Beeline. Our technology edge remains a central driver of our momentum. Our AI sales agent, Bob 2.0, has delivered outstanding results. As we mentioned on our last call, we're seeing six times increase in lead conversion and an eight-time increase in full mortgage applications, all while operating 24-7 at near-zero incremental costs for this portion of our business. These results are a testament to our product team and proof that automation can deliver both volume and efficiency at scale. In the coming quarters, we'll be sharing key metrics such as NPS and other indicators to help you evaluate how our technology is driving V-Line's brand, customer retention, and earned media. We're also seeing strong performance from Hive, our workflow engine, which enables us to close loans in as little as 14 to 21 days, about twice as fast as traditional lenders. This efficiency allows us to handle growing volume without adding proportional costs, giving us a real structural advantage. We also expanded our reach through strategic partnerships that embedded Beeline at critical moments in the property lifecycle. With Red Awning and Red Boo embedding Beeline's lending into vacation and short-term rental platforms. with CreditVolve, helping us build a pipeline of credit-challenged borrowers preparing for home ownership. Through B-Line Labs, advancing fintech innovation, including work with MagicBlocks and BlinkQC. These partnerships position us to capture customers right at critical property decision points. We remain disciplined on cost, even as we continue investing in growth. During the quarter, we reduced debt by $2 million and remained focused on expanding our warehouse capacity to support increasing loan demand. Importantly, our growth is not limited by customer demand. It is limited by access to capital. We're actively addressing that, and we expect meaningful progress in the near term. Before I turn it over to Chris, let me highlight what to expect in Q2 and beyond. fund. In Q2, we'll begin closing beta transactions for a new partner using a unique token backed by a stablecoin and structured to deliver U.S. dollars directly to Beeline and to Beeline's clients who wish to access equity in their homes via the crypto market. It's a first-of-its-kind product that leverages blockchain infrastructure to unlock real estate capital, and we believe it will drive new revenue streams while disrupting traditional lending norms. Our partner will be responsible for minting and selling the coins, while Beeline will focus on sourcing and closing the underlying real estate transactions. Only U.S. dollar proceeds will be delivered directly to Beeline. The structure mirrors our correspondent lending relationship, but with a modern twist. Our partner is leveraging emerging gig economy assets that are rapidly gaining mainstream adoption. We believe this product addresses real market demand, will be well received by our customers, and has the potential to transform the industry and will help us get to profitability much sooner. To be clear, this offering is designed to complement, not replace our traditional mortgage products and processes, which remain the foundation of our business. We expect to close five to 15 beta transactions in June, with a broader launch targeted for Q3. We expect to show continued improvement in both revenue and our expense structure. My goal as CEO is to lead D-Line towards sustainable growth and profitability. While it's difficult to precisely forecast milestones such as operating cash flow, we expect to show continued progress as our investments and prior projects flourish. We will continue to make significant investments to drive revenue growth. Our pace of investment will likely increase, and I see it as my responsibility to clearly explain the rationale behind these investments. Over the coming months, we will communicate regularly on our development plan, including the Latinberg Conference on May 21st. With that, I'll turn that over to Chris. Thanks, Nick.

As a reminder, due to pro forma accounting adjustments and GAAP purchase accounting rules, our income statement and balance sheet reflect the impact of the recent forward merger transaction, and as such, certain comparative periods are not directly comparable. Additionally, MagicBlox, our AI product technology company, in which we hold a significant minority stake, is not consolidated in our income statement under GAAP. By contrast, our legacy spirits business, Bridgetown Spirits Corporation, is consolidated in our results based on gap rules on control. We've worked to highlight the performance of both businesses to provide transparency into their contributions. Let me now walk you through the Q1 2025 financial highlights. total net revenues were approximately 1.83 million up sharply from 0.6 million a year ago driven primarily by the addition of beelines mortgage activities which accounted for over 70 percent of revenue for the quarter with the remainder from the legacy east side spirits business mortgage revenue streams included 970 000 in lending revenue and 376 000 in title revenue making $1.35 million in total beeline financial revenue. The spirit segment contributed $482,000 in net sales. In terms of growth rates for our mortgage business, Q1 2024 versus Q1 2025, as we saw a 24% increase in average loan amount, a 28% increase in average revenue per loan, and a 93% increase in title revenue. On the expense side, operating expenses totaled approximately $6.8 million, reflecting investments in technology and people, with $2.3 million in salaries and benefits, $1.2 million in professional fees, $0.6 million in marketing and advertising, and $0.8 million in depreciation and amortization. This resulted in a loss from operations of $4.9 million, driven largely by scaling our mortgage platform. Below the line, we incurred $1.9 million in interest expense, mainly reflecting usage of our warehouse line of credit and corporate debt. We reported a net loss of $6.9 million. While this loss is significant, it reflects deliberate investments and one-time capital structure effects. Our core mortgage operations are scaling well, and we are confident these investments will position us for a step change in performance in the quarters ahead. For example, on a q125 to q124 basis beeline financial holdings reported the three months ended march 31st 2024 in other words a year ago beeline financial originated 42.3 million in residential mortgage loans and reported net revenue of 1.2 million and a net loss of 3.1 million fast forward a year the three months ending march 31st 2025 beeline financial originated 39.8 million in residential mortgage loans but reported net revenue of 1.4 million and a net loss of 2.3 million we're also seeing promising contributions from our partners including magic blocks whose results are not reflected in these figures turning briefly to the balance sheet we ended the quarter of the 1.5 million in cash and about a half a million of warehouse line availability subsequent to quarter end we raised additional equity and shrank total liabilities by 1.9 million total equity at period end was 48.1 million dollars regarding cash flow net cash used in operating activities was just under 1.5 million net cash used in investing activities was 65 thousand dollars and net cash provided by financing activities was just over 1.8 million for a net increase in cash of just over 300 000 for the period while i won't provide firm q2 guidance due largely to the pace of transformation in the business. I agree with Nick that we expect to see sequential improvements in reducing operating losses and scaling revenue over the balance of the year. With that, I'll turn it over to the operator for questions. Thank you.

We will now begin the question and answer session. To join the question queue, you may press star then one on your telephone keypad. You will hear a tone acknowledging your request. If you are using speakerphone, please pick up your handset before pressing any keys. To withdraw your question, please press star then two. The first question comes from Glenn Mattson with Lattenberg Taumann.

Please go ahead. Hey guys, thanks for taking the question and congrats on the strong results. And apologies if there's any background noise, I'm in the train station as we do this call. But just on the results, curious about the new equity product line that you talked about. introducing it in this quarter and some early sales this quarter. Can you just give us a sense of the sales funnel, how you build that, and what kind of impact it could have on the business, how quickly you could see it grow, and just how you get the word out there to drive volume in that line?

Hey, Glenn. It's Nick. How are you? So, look, I think we want to be careful what we say here. we spent a lot of time on developing and thinking through a product that would be interest rate neutral and a product that would infuse liquidity into the market, primarily helping people who can't qualify for cash out refis or people that have properties that won't qualify for a cash out refi or situations where getting liquidity is difficult. And so we've designed a product that allows these consumers and these properties to capitalize on equity that they have, but current underwriting conditions don't allow for them to take cash out. And so at a real high level, that's what we're doing. Now, this product can evolve into other areas and possibly get into areas of down payment assistance and other areas for investors to grow their investment property portfolios. That's not our focus for phase one. That's something that's on the drawing board. Phase one is more on the cash-out piece. As far as growth goes, anything that's not tied to interest rates, being in the mortgage space that has high demand, is very attractive for companies like Beeline. So we anticipate this product to get us a profitability a little sooner than we anticipated. We don't need a whole bunch of transactions to get there, which is great. And, you know, the product is highly automated, so the labor cost behind the product is minimal, and so the margins will be very strong. So, you know, and from an operating standpoint, you know, we've been building a lot of software and technology, and the end result of that is scale. And, you know, the volumes really aren't there yet to kind of really see the benefits, It's the true benefits of the platform, you know, the combination between scale and labor. And so, again, I would just say stay tuned and keep your eye on B-Line. I think the stars are lining up for us. So thanks for the question.

Thanks. If I could ask a follow-up just on the margin profile, the improvement year-over-year, as Chris laid out, just a sense of what's driving that. and then maybe just – I don't know if you have any color as to, you know, how you think that's going to progress over time.

Chris, you want to take that one?

I'm happy to, Glenn. Can you restate the question a little more clearly for me?

Yeah, just a little bit more background on the margin profile and how it improved. You kind of highlighted the improvement year over year, just what's driving that and where you think it can go over time or what kind of pace of – we should expect.

Yeah, so I'll share some internal data with you and the rest of the people on this call. So I'm looking at an internally developed chart, and the average total revenue per loan back in January of 24 was just over $5,000, which – and that reflects sort of a poor market and maybe too much overhead. And as of March this year, that had increased to $7,661. So that's a pretty impressive change in pricing, basically more than 50% up. And in a good market, which Nick has experience with, it's not uncommon to see that number be at or around $10,000. So we're sort of halfway to the goal, if you will. I think that's partly due to slightly improving market. I think it's also due to the mix. We've been over time moving sort of away from conventional and towards non-QM. And non-QM transactions are harder to do, but they're also, you know, more valuable to us. And other than that, I don't have much to add.

Yeah. No, that's very helpful, Chris, and impressive results, and I look forward to seeing you guys at our conference tomorrow, so thanks for taking the question.

Great. Thanks for asking it.

This concludes the question and answer session. I would like to turn the conference back over to Nick Laiuzo for any closing remarks. Please go ahead.

Thanks, Operator. To wrap up, Q1 marks an inflection point for Beeline. We have fully transitioned into a fintech mortgage company, not a niche player, but one built to scale and compete with the largest lenders in the country. We've built Beeline to compete in a $2 trillion market, not as a niche player, but as a tech-first category leader. Yes, we are investing heavily today, but these are intentional, foundational investments aimed at capturing meaningful market share over time. We're confident the long-term payoff will be significant. Looking ahead, we have exciting initiatives in the pipeline, including new AI-driven solutions, potential SaaS products, and expanded strategic partnerships. While we will share details in due course, these initiatives reflect our ambition to reshape borrower behavior across the country. I want to close by thanking our team, our partners, and our shareholders. We are energized by the progress we've made and confident in the long-term value we're building. Thanks to everyone for listening, and we look forward to seeing many of you at the Leidenberg Conference.

This brings to a close today's conference call. You may disconnect your lines. Thank you for participating, and have a pleasant day.