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Good day, and welcome to the Beeline Holdings, Inc. Second Quarter 2026 Earnings Conference Call. All participants will be in a listen-only mode. Should you need assistance, please signal a conference specialist by pressing the star key followed by zero. After today's presentation, there will be an opportunity to ask questions. To ask a question, you may press star then one on a touch-tone phone. To withdraw your question, please press star and then two. Please note this event is being recorded. I would now like to turn the conference over to Tiffany Milton, Chief Accounting Officer. Please go ahead.

Thank you. Good evening, everyone, and thank you for joining us today to discuss Beeline's results for the second quarter of 2026. I'm Tiffany Milton, Beeline's Chief Accounting Officer. Joining us on today's call to discuss these results is Nicholas Liuzza, our Chief Executive Officer, Jess Kennedy, Chief Operating Officer, and Chris Moe, our Chief Financial Officer. 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' expected future growth of its core business, increased revenue, growth of fee-based revenue streams, including Beeline Equity, operating priorities and plans, goals and expectations for future operating results and expenditures for the remainder of 2026 and beyond, plans and expectations for a potential merger with TYTL and the opportunities and benefits offered by such a transaction. 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, undertake, and 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 2025 Form 10-K and prospective supplement dated March 10, 2026, which was filed with the SEC. 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 Liuzza. Nick, please proceed.

Hello, shareholders, investors, and friends of Beeline. Before discussing the quarter, I want to highlight that yesterday I personally invested an additional $500,000 into Beeline, which will automatically convert next Wednesday into common stock at a minimum price of $1.50 per share. I made that investment because I believe strongly in the direction of the company, the progress we're making, and the opportunity that lies ahead for all of us. Our strategy is straightforward. Generate more revenue per transaction, require less incremental operating expense to grow our business, and become increasingly less dependent on the traditional mortgage cycle while continuing to improve the unit economics of our core business. With that said, let's turn to Q2. Q2 was another quarter of meaningful progress. Revenues increased 57% year-over-year. Our net loss declined by 24% from the previous quarter. Our quarterly cash burn decreased to $1.7 million.

June expenses dropped by $369,000 versus May. Our product mix continued shifting toward the higher-margin non-QM products. We completed the acquisition of MagicBlocks, an important component of our AI strategy. Subsequent to the quarter end, we announced the proposed acquisition of TYTL Corp. The mortgage environment remains challenging. Interest rates, capital markets, and geopolitical uncertainty continue to weigh on traditional mortgage and refinance activity. Against that backdrop, we're focused on what we can control. Last quarter, we discussed our increased focus on two higher-demand, higher-margin products, our bank statement loan and our DSCR loan. We're now beginning to see the impact of that shift. In July, our margins reached their highest level in the company's history. Revenues reached its highest level of the year, and monthly cash burn fell to its lowest level in years.

We certainly have a long way to go, but considering the headwinds, we're happy with the progress. Our objective is simple: grow revenues faster than expenses and create increasing operating leverage as Beeline scales. Chris will talk through the financial results in greater detail. During Q2, we completed the acquisition of MagicBlocks. MagicBlocks provides AI-driven sales and workflow technology already integrated into Beeline's customer acquisition and conversion process. Bringing that technology fully in-house gives us greater control and allows us to deploy it across all of our products, including Beeline Equity, which is supported by TYTL. This was a key consideration in completing the transaction. Objectives are straightforward. Increase conversion, reduce customer acquisition costs, and automate customer communications at very low cost. For Beeline, AI is not simply about the technology. It's about improving the economics of the business.

Every improvement in conversion and every workflow we automate has the potential to increase operating leverage as we scale our business. As mentioned, we entered into a non-binding LOI for a proposed all-stock transaction with TYTL. TYTL provides the underlying infrastructure supporting Beeline Equity. During the quarter, we continued advancing Beeline Equity, our fractional home equity offering developed in partnership with TYTL. The transactions are recorded in the public record with details logged on the blockchain and represented by a Reg D digital security. U.S. homeowners currently hold approximately $17 trillion of home equity, and based on TYTL's underwriting criteria, we estimate an initial addressable market of approximately $1 trillion.

This represents a significant opportunity to drive new revenues for Beeline. As we mentioned, the LOI is non-binding. We continue to work with TYTL toward a closing, which is subject to shareholder approval, a fairness opinion, and a valuation analysis.

If we can close the transaction with TYTL, then there are three key elements to the transaction. First, a unique product offering. TYTL's residential equity product provides qualified homeowners access to their home equity without monthly payments or a maturity date, and with economics that are not directly tied to interest rates. Second, higher revenue per transactions. Based on the economics, we currently anticipate a TYTL transaction could generate approximately three times the revenue of a traditional Beeline mortgage transaction. That has the potential to accelerate our path toward cash flow positive operations while materially increasing the revenue potential of the platform. Third, a digital asset treasury. The combined companies expect to retain Regulation D digital securities equal to approximately 5% of each TYTL transaction, creating the potential to build a growing balance sheet portfolio backed by ownership interest in prime residential real estate.

Over time, that portfolio could become a strategic asset and potentially support non-dilutive initiatives, including acquisitions or share repurchases. The companies are in the process of engaging an investment banker to assist with the sale of TYTL digital securities to institutional investors to fund transactions and to potentially provide access to capital on more attractive terms. If we can execute successfully, Beeline can evolve from primarily a mortgage lender into a broader residential finance and real-world asset platform, combining mortgage origination, title, AI-driven technology, fractional home equity, and digital securities on a common infrastructure. We believe that creates a substantially larger, longer-term opportunity for Beeline. To summarize, we're improving the economics of our core mortgage business. We're shifting toward higher margin products. We're reducing our cost and our cash burn. We're using AI to improve conversions and operational leverage. We're expanding into products that are less dependent on interest rates.

We're building Beeline Equity into a different growth platform. Our strategy is straightforward. Generate more revenue per transaction, require less incremental operating expenses to grow, become increasingly less dependent on the traditional mortgage cycle. Q2 demonstrated meaningful progress toward the objectives, and I believe the opportunities ahead of us are substantially greater than they were at the beginning of the year. This is why I invested an additional $500,000 of my own capital in Beeline at $1.50 per share. We have more work ahead, but Beeline is becoming stronger. It's becoming different and better. It's positioned for much higher scalable growth. With that, I'll turn it over to Jess.

Thank you, Nick. Q2 was the quarter where the strategy that Nick just described, choosing economics over volume, started showing up clearly in our operating results. First, origination trends and volume. Our closed lending units were up 28% year-over-year and up 68% for the first six months versus the first six months of last year. But the more important number is this: revenue grew 57% in the quarter, meaningfully faster than unit volume, which means revenue is growing faster than volume, which is evidence that the mix of non-QM to QM is working. Turning to product mix and margin performance, mid-quarter, we deliberately shifted our origination mix towards the two higher demand, higher margin non-QM products that we discussed on the last call, the bank statement loans and DSCR loans. And we pulled back our marketing spend on the conventional products where the returns were less attractive.

That shift can now be seen in our margins. Our overall margin improved 10% from Q1 to Q2, and July margin hit a company record primarily due to that loan product mix. Revenue per loan increased 4% between Q1 and Q2. On a monthly basis, revenue built between April and June with a 19% jump from April to May and another 3.5% jump from May to June, which means we exited the quarter more than 20% from where we started the quarter. Behind that is a deliberate mix change. Conventional loans fell from about a third of our closed units in Q1 to about 20% in Q2, while bank statement volume nearly tripled. At more than twice the revenue profile of a conventional loan, DSCR remained our largest product with stable margin. We are not chasing volume at the expense of margin.

Because the shift happened mid-quarter two, it only partially is reflected in our numbers. We expect the impact to be more pronounced going forward. Now on to unit economics across the platform. To feed into better per unit economics, we also modified our workflows on our non-QM products, cutting down on third-party expenses. Discipline showed up across our revenue lines as well. Gain on sale of $1.75 million grew 58% year-over-year, faster than units, which means we are earning more per loan, not just closing more loans. Loan origination fees more than doubled, tracking unit volume, and title revenue also grew 12% in the quarter. Every loan we originate now carries more revenue and attached services than it did a year ago. For technology and automation, facilitating the economics is obviously our technology. During the quarter, we completed the acquisition of remaining interest in MagicBlocks.

The AI platform driving our customer acquisition and conversion is now fully in-house. Operationally, that lets us deploy it across more of the customer journey. From Bob, our AI chat experience at the top of the funnel through self-service application workflows and into back-office workflows. This quarter, our focus is on AI-facilitated back-office workflows, underwriting support, document handling, closing coordination, with the goal of continuing to shorten our speed to close and lower our cost to produce on each loan. With respect to Beeline Equity, in Q1, we built the operating infrastructure, and in Q2, we ran that infrastructure, completing transactions end-to-end and validating workflow with title and settlement attached to each transaction. The volumes are still early and as Nick Liuzza discussed, the proposed TYTL combination, which remains subject to due diligence, definitive agreements and required approvals, could meaningfully change the scale of this opportunity.

From an operations standpoint, our job is to make sure the platform is ready to scale and that work is well underway. For second half of the year priorities, they are to grow revenue per loan and protect the margin as volume scales. Continue shifting mix towards bank statement and DSCR products and add other equity loan products to the lending offerings. Expand AI and automation into the back-office operations more to reduce cost per file. Scale Beeline Equity in a disciplined way, and support the company's progression towards the breakeven point. With that, I will turn it over to Chris Moe to walk through the financials.

Thanks, Jess. I will walk through our second quarter financial performance, including the sequential progress we made from Q1, and then cover our balance sheet, cash flow, and financial priorities. Turning to Q2 financial performance, our second quarter total net revenue was $2.6 million, compared with $1.7 million in the prior year quarter, an increase of approximately 57%. The revenue mix was as follows: gain on sale of loans net was $1.8 million, up approximately 58% year-over-year. Loan origination fees were $381,000, more than double the $186,000 reported last year. Title fees were $407,000, compared with $365,000. Lastly, fractional equity revenue was $21,000 and other revenue was $64,000. Net interest income within revenue was approximately breakeven. Revenue growth remained broad-based across our mortgage title and other revenue categories. Sequentially, total revenue was approximately 3% lower than Q1, while originated loan volume was approximately 17% lower.

The stronger revenue per origination indicator reflects the improved economics and mix of the business. Let's turn to expenses and operating performance. Total operating expenses were $7.1 million, compared with $5.6 million in the second quarter of 2025. The current quarter total included $1.1 million of stock-based compensation and $806,000 of depreciation and amortization. The year-over-year increase was driven primarily by stock-based compensation, commissions associated with higher loan activity, marketing, investor fees, and software costs. General and administrative expense declined approximately 13% year-over-year or $1.2 million. Sequentially, operating expenses decreased by $748,000 or approximately 10% from Q1. Excluding stock-based compensation, operating expenses decreased approximately 12% sequentially. Key expense categories included compensation, commissions, and benefits of $3 million, general and administrative expense of $1.2 million, marketing and advertising of $1.1 million, depreciation and amortization of $806,000, and other operating expense of $958,000.

The loss from operations was $4.5 million, compared with $3.9 million a year ago. On a sequential basis, operating loss improved by $677,000, or approximately 13% from Q1. These sequential results show that a tighter cost base is beginning to translate into improved operating performance. Net loss was $4 million, compared with $4.1 million in the prior year quarter, and sequentially net loss improved by $1.2 million or approximately 24% from Q1. The current quarter included a $480,000 non-cash gain from remeasuring our previously held interest in MagicBlocks when we completed the acquisition of the remaining ownership interests. Excluding that gain, the sequential trend still improved. Adjusted EBITDA was a loss of $2.6 million compared to the loss of $2.8 million in the prior year quarter. That is a narrowing of $151,000 or approximately 5% improvement. Compared with Q1, adjusted EBITDA improved by $412,000, or approximately 14%.

Specifically, adjusted EBITDA excludes non-cash expenses such as stock-based compensation, depreciation, and amortization, as well as certain non-recurring or non-operating items. The year-over-year improvement was modest, but the sequential improvement in operating loss, net loss and adjusted EBITDA was meaningful and consistent. MagicBlocks accounting. We completed the acquisition of the remaining 52.4% interest in MagicBlocks on June 30th. The purchase price was valued at approximately $638,000, including the fair value of our original interest and the shares issued, net of a preexisting liability that was forgiven. Because the transaction closed on the final day of the quarter, the second quarter statement of operations does not include MagicBlocks' operating results. Those results will be consolidated beginning in the third quarter. The purchase price allocation remains subject to completion during the permitted measurement period. Let's go to the balance sheet and liquidity.

As of June 30, 2026, we had cash and cash equivalents of $1.4 million, plus $73,000 of restricted cash. Mortgage loans held for sale of $10.8 million. Warehouse lines of credit and accrued interest of $10.4 million. Total shareholders' equity of $50.5 million. Warehouse borrowings declined by approximately $5 million from March 31, as loans held for sale declined by approximately $6.5 million. Our warehouse facilities are used to fund mortgage loans held for sale and therefore move with production and loan sale timing. Let's talk about cash flow and capital strategy. For the first six months of 2026, net cash used in operating activities was $1.5 million, compared with $5.6 million in the prior year period, an improvement of $4.1 million or approximately 74%.

Based on the year-to-date cash flow statement and the Q1 results, operating cash flow was positive by approximately $2.2 million during Q2, compared with operating cash use of $3.6 million in Q1. That sequential movement was materially affected by working capital, including the timing of mortgage originations and loan sales, and should not be interpreted as a normalized quarterly cash burn rate. During the first six months, we repaid a net $4.1 million under warehouse facilities. That was largely offset by approximately $4.1 million of net equity proceeds and warrant and option exercise proceeds, resulting in net cash used in financing activities of $74,000. Cash and restricted cash declined by approximately $507,000 during Q2, compared with a decline of approximately $1.2 million during Q1. We remain focused on reducing the rate of cash use while recognizing that working capital and financing timing can create quarter-to-quarter variability.

Subsequent to quarter end, we issued a $350,000 principal amount promissory note for a purchase price reported at approximately $300,000 net of an original issue discount. That note bears interest at 9% and has a 60-day maturity. We also received $500,000 from our largest shareholder and exchanged issued the shareholder a convertible note in the principal amount of $500,000. We are actively managing liquidity while improving the operating profile of the business. Let's talk about our financial priorities. Looking ahead, our financial priorities remain straightforward. Continue growing revenue and improving revenue generated per transaction. Increase the contribution from higher margin and capital light revenue streams. Maintain the sequential cost discipline demonstrated in Q2. Integrate MagicBlocks in a way that improves automation and operating leverage. Reduce cash use while maintaining access to appropriate sources of capital.

Lastly, we expect to complete the proposed merger with TYTL Corp, which, in addition to definitive legal documentation, will also be subject to a tax loss carry-forward analysis, valuation opinion for Beeline accounting purposes, a fairness opinion, and a Beeline shareholder vote. We are not providing formal financial guidance today. Our focus is on executing against these priorities and reporting measurable progress as it is achieved. To summarize, second quarter revenue increased approximately 57% year-over-year. Sequentially operating expenses decreased approximately 10%. Operating loss improved approximately 13%. Net loss improved approximately 24%. Adjusted EBITDA improved approximately 14%. We still have work to do, particularly around operating losses and liquidity, but Q2 demonstrated measurable progress in the underlying economics and cost structure of the business. With that, I'll turn it back to Nick.

Thank you. We will now begin the question-and-answer session. To ask a question, you may press star then one on your touchtone phone. If you are using a speakerphone, please pick up your handset before pressing the keys. If at any time your question has been addressed and you would like to withdraw your question, please press star then two. At this time, we will pause momentarily to assemble the roster. The first question will come from Calvin Seto with Clear Lake, please go ahead.

Hi. Good afternoon? Thanks, the management team. Sounds like an incredible quarter creating a leaner organization and preparing for the work of scaling ahead. I have a few questions. I hope you can bear with me. The first one was this, right? We know that Beeline takes about 3%-3.5% of the transaction. And if I heard it correctly, as a merged entity, hypothetically, the revenue upside could be 2x-3x higher. I'm looking at this quarter, right? We landed about $2.6 million of revenue and adjusted EBITDA of $2.6 million too. Hypothetically, if the transition were to occur as a merged entity, seems like we could be nearer to the breakeven, right? That's what I'm looking at. Also reading the press release, the July operating margin is expected to be the highest since inception.

If I look at the word correctly, since inception. I'm pretty sure that we were super close to breakeven at some point. Am I interpreting it correctly?

Yeah. Thank you for your question. It's pretty involved and I have to be careful what I say. Assuming the transaction closes, which I've got a high degree of confidence in because there's no reasons it shouldn't, that I'm aware of. And assuming it closes early in the fourth quarter, and also assuming capital is raised around that transaction primarily for backing as opposed to equity dilution. I think the TYTL-Beeline Equity combination is going to generate rapid revenue growth. As you said, the scale is per unit of volume, the revenue is about 3x-3.5x higher. Yeah, that would move our cash breakeven point up wherever you have it to sometime earlier.

Got it. Also a follow-up, right?

What's that?

Yeah, I do have a follow-up. It seems like the management is very confident about TYTL. What are some factors contributing to that confidence?

Yeah, look, this is Nick. We are very comfortable and confident in the management at TYTL. We've been working with that group for about a year and a half. What we have worked on together and brought to market together is, it's not an easy product. It's complicated, and it's beneficial for investors, it's beneficial for both companies, and it's beneficial for the homeowner as well. I think that if you talk to the TYTL folks, they'll tell you that they're very comfortable with Beeline, and I'm telling you right now, we're very comfortable with them because we've worked so hard together on getting the product to where it is today, and also discussing the possibility of tokenizing other parts of the business, like potentially RMBS, which those discussions have already happened and some preliminary plans have already materialized around that.

Yes, I would say that we're partners. We're trusted partners, and we feel really good about the future together.

Got it. Just one last question. When I look at it, I think Beeline was started in 2019, and today it carries on a market cap of about $35 million. It could be worth higher, but that's how the market is pricing Beeline right now. TYTL is under two years. We do not know the revenue. We do not know the financials, head count. We do not know as well. Based on the 10-K that was released, we are looking at a 60/40 split. That is like an implied valuation of $23 million for a company that's under two years. I just want to reconcile it and try to understand from the management point of view, what is giving the valuation of TYTL?

Yeah. So great question. If there were more numbers and this was a more mature business segment, we could talk about a multiple of this versus a multiple of that. My answers are going to be largely qualitative. Starting from the outside, the big picture, the amount of single-family homes in the U.S. that don't have a mortgage at all is about 40%. The TAM or total addressable market, any way you cut it, is $3 trillion-$5 trillion. The specific TAM we're looking at is right around $1 trillion, and that's defined as single-family homes in the top 20% of ZIP codes that have shown a CAGR of 6.5% over the last decade, and are in good shape. We have very few. There's no one exactly like this thing. We have some competitors that are doing a similar approach.

Again, huge TAM plus low competition equals big revenues and big profits. There's also a substantial amount of existing IP. I don't have time to get into it right now, but it's very compelling. As I said before, there's at least 3x the revenue opportunity per same size transaction. Then to get to your point, we're trading at 2x-4x revenues, which is typical for a company classified as a mortgage banking company. We transform ourselves into a fintech platform, and the multiples on that are between 5x and 15x, with a median of around 8x. So significant uplift. It also comes with a digital treasury and we'll be expanding that. Lastly, but not least, there's a great management team. Nick and Drew have known each other for, I think, 15 years. They brought this deal to us.

We've worked with them very closely for a year and a half. The current arrangement is they're our supplier, we're their customer. We're just putting the two together. The management team comes with deep capital market access and sophisticated AI tech skills. What's that worth? I think a lot of people have different opinions, but I think it's a fair deal.

Yeah. Look, there's going to be an evaluation analysis, a fairness opinion, and the shareholders are going to have the final say. More information will surface. But at the end of the day, I think that the multiples in that space that they're in happen to be much higher than the multiples that we're in, and that factors in at the end of the day. But the bankers will help us put this deal together. They'll help us with the fairness opinion, the value analysis, and ultimately, like I said, the shareholders will have the final say.

Yeah.

Okay. Thank you so much for the great details. Sorry, I just have one very last question. I know we carry loans on sale on our balance sheet, and we know that the loans value move according to interest rate environments. We do not know where the interest rate is going to hit in the next six, 12 months. But let's say if interest rates continues to go up, is there any risk to the value of our loans on our balance sheet?

I can take that. This is Jess. We don't keep the loans on the balance sheet for more than a couple of weeks at a time. We try to get them off the balance sheet as quickly as possible, actually, and get them sold because we make revenue on the gain on sale. If there's loans sitting on balance sheet, it's just for a very short period of time.

All right. Thank you. Thanks for the explanation. Thank you.

Sure. Yeah.

The next question will come from Matthew Campbell with Laridae Capital, please go ahead.

Hey, good afternoon, and appreciate all the context to what you guys are doing. You can't control the market itself and the rates, but sounds like you're doing a lot to bring in more revenue and more profit per transaction, which is commendable. I guess a couple of things I'd love to get a sense from you guys about is, could you shed some light on the digital securities that you'd hold if you do this TYTL transaction?

Yeah. Hey, Matt. Thank you for the call. We appreciate it. TYTL created an institutional-grade Reg D security that supports the transaction, the equity transaction. It is only available to institutions at this point. Every single transaction that is consummated there are digital securities that support that. The way the model works is TYTL will keep approximately 5% of the transaction value as digital securities. If the transaction value is $200,000, approximately $10,000 of Reg D digital securities will be held by TYTL and held on the balance sheet. When we acquire TYTL, they already have a portfolio of transactions that have been completed and Reg D securities sitting on the balance sheet that would come over as part of that transaction. Every transaction that we would do would be adding to that treasury through the sale of equity.

Over time, as that digital security becomes an asset with greater liquidity, it becomes an asset for Beeline that we can use for whatever we want. We can use it for acquisitions. We could use it to buy back shares. We could use it for operating capital. The point is it is non-dilutive capital that could come in very handy. If you think about $1 billion of transaction value, which is not a lot in this business, that is about $50 million of digital Reg D securities held by Beeline. There is a lot we could do with that at the end of the day. That is the real high level on that piece.

Got it. That is helpful. I appreciate you guys not giving any formal guidance given the market uncertainty, but it did sound like you had some very good momentum in the margin structure of your business through the last quarter. Can we look at that and attribute that as any indication for this upcoming quarter in terms of shifts and just the momentum?

Sure, I can take that. Hey, Matt, this is Jess. Like you said, we are not going to give guidance, obviously, and we will report on that fully for the third quarter numbers. Nick hit on some of it, and I hit on some of it as well earlier in the call. In April timeframe, we sort of sat down and said, how are we going to drive the revenue differently, like you said, without having some kind of magic wand to improve interest rates or the macro environment. We know that we do a super solid job in our non-QM products. The margins are solid. It was really about aligning marketing dollars a little differently and getting that mix right for what is going to drive us the highest revenue, highest margin. We just made some really strategic moves there.

What you saw in Q2 was what I would say the building of that. Like I said, I think July shows that momentum continuing. We do expect, barring some type of crazy unpredictability that July can be seen as momentum continuing forward even though, like I said, we can't give full guidance. But we do anticipate some things to continue positively in that direction.

Yeah. Look, July is certainly better than our first quarter, our first month of the previous quarter. We hope that the trend continues.

Well, you're not sitting still there.

Thank you, Matt.

Appreciate answering the questions. Take care.

Thanks, Matt.

Thanks, Matt.

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

Let me close with this. We believe the fundamentals of Beeline are improving. Revenue is growing, margins are expanding, expenses and cash burn are coming down, and our core mortgage business is shifting toward higher-margin products. At the same time, we're building a business that we believe can become increasingly less dependent on traditional mortgage cycles. The proposed TYTL transaction could be an important part of that transformation. If completed, it would add a new residential equity product that we expect could generate approximately three times the revenue per transaction of a traditional Beeline mortgage while giving us exposure to residential real-world assets and a revenue stream whose economics are not tied to interest rates. Combined with MagicBlocks and our existing mortgage and title infrastructure, we believe TYTL has the potential to materially expand both the economics and the long-term opportunity of the Beeline platform.

Our strategy remains straightforward: generate more revenue per transaction, grow revenue faster than expenses, and build a more scalable and more diversified business by leveraging our proprietary AI. Q2 demonstrated meaningful process, and we expect that momentum to continue in Q3. I've supported Beeline, and I will continue to do so. We still have work to do, but I believe Beeline is stronger and becoming a different company with a substantially larger opportunity in front of it. Thank you for joining the call, and I look forward to seeing everyone on the Q3 Earnings Call. Thank you.

The conference has now concluded. Thank you for attending today's presentation, you may now disconnect.

Good day, and welcome to the Beeline fourth quarter 2025 financial results conference call. All participants will be in a listen-only mode. Should you need assistance, please signal a conference specialist by pressing the star key followed by zero. After today's presentation, there will be an opportunity to ask questions. To ask a question, you may press star then one on a touch-tone phone. To withdraw your question, please press star and then two. Please note this event is being recorded. I would now like to turn the conference over to Tiffany Milton, Chief Accounting Officer. Please go ahead, ma'am.

Thank you. Good evening, everyone, and thank you for joining us today to discuss Beeline's financial results for the fourth quarter of 2025. I'm Tiffany Milton, Beeline's Chief Accounting Officer. Joining us on today's call to discuss these results is Nick Liuzza, our Chief Executive Officer, Jess Kennedy, Chief Operating Officer, and Chris Moe, our Chief Financial Officer. 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' expected future growth of its core business, increased revenue, growth of fee-based revenue streams including BeelineEquity and expansion of our SaaS and AI capabilities and expansion of our warehouse lines.

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, undertake and 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 2025 Form 10-K we are filing tomorrow and prospectus supplements we have filed with the SEC. 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 being said, I'll turn the call over to Nick Liuzza. Nick, please proceed.

Good afternoon, everyone, and thank you for joining us today. 2025 was a transformational year for Beeline. We simplified our balance sheet, grew the core mortgage business and began to demonstrate operating leverage in the model. We also introduced new capabilities across the platform, including version one of our self-service mortgage experience, designed to streamline and simplify the borrower journey. As we enter 2026, our focus is on building on that progress, disciplined execution, continued growth in the core business and the expansion of new revenue streams, positioning Beeline to accelerate its revenue growth with stronger loan-level economics. Some of the 2025 highlights include. We became a public company, strengthening the balance sheet through equity capital raises and the elimination of debt. We increased year-over-year revenues by 127%.

We delivered strong growth in our core mortgage business with improvements across originations, revenue per loan and conversion efficiency. We began to see operating leverage in the model as revenue growth outpaced growth in fixed costs. We laid the groundwork for additional capital-light, fee-based revenue opportunities. We executed through challenging market conditions while navigating increased expenses as a new public company. Today, we've established Beeline as a digital-first real estate finance platform with a diversified mix of mortgage products and an increasing mix of fee-based revenue streams. Let me frame how we think about the business going forward. Our core focus remains on serving borrowers that are often underserved by traditional lenders, including self-employed individuals, younger borrowers and real estate investors. This is a large and persistent segment of the market, and we've built our platform specifically around their unique needs with a fully digital experience and integrated title capabilities.

At the same time, we're beginning to expand beyond traditional mortgage lending, adding a more capital-light transaction-based revenue stream to our existing suite of mortgage products. An exciting development this year in that regard is the encouraging early progress of our BeelineEquity platform and our partnership with TYTL Holdings. We appear to be ahead of the market with a unique equity product that is not tied to interest rates, infusing much-needed liquidity into the market with little to no direct competition. BeelineEquity is not just a new product. It's a new transaction layer for residential real estate. BeelineEquity allows homeowners to access a portion of their home equity without refinancing or taking on additional debt while creating a new investable asset class. For Beeline, this is a fee-based model where we provide the infrastructure around the transaction.

BeelineEquity is a pure equity play unlike many of the HEI products on the market. Importantly, our model is capital light and fee driven. Beeline primarily provides the infrastructure, customer acquisition, property analysis, the operational platform, title, settlement and compliance. We earn 3.5% per transaction without assuming any principal risk. We also earn title revenue. We began closing initial transactions with TYTL as our partner in the fourth quarter and are building a growing pipeline heading into 2026. We monetize transactions, not interest rate spreads, which fundamentally changes the economics of our business. Our model scales with transaction volume, not balance sheet capital. Our focus is on measured scaling and validating the unit economics as the product develops. We believe this is a structurally different and more scalable business model than traditional mortgage lending.

To frame the opportunity, there's nearly $40 trillion of home equity in the U.S. that is effectively illiquid. BeelineEquity is designed to unlock that liquidity in select ZIP Codes, and we see significant opportunity over time, particularly given the limited number of solutions available to access it without recording a debt instrument. As the market develops, we believe Beeline is uniquely positioned as a first mover with a fully integrated platform. The expected initial use case for BeelineEquity is to enable homeowners, including many older borrowers who have built meaningful equity in their homes, to access liquidity without taking on additional debt or selling their asset. More broadly, we are building a product set that addresses different borrower needs over time, from acquisition and investment financing to home equity access.

In general, the primary use case for the BeelineEquity product is retirees who are asset rich but cash poor and are reluctant to sell their properties. Beeline now has products across the demographic spectrum, a wider variety of loans for younger borrowers, equity products for older homeowners who need or want to tap into some of that accumulated wealth. At the same time, our core business continues to improve. I'd like to turn the call over to Jess Kennedy, our COO and Co-Founder, to discuss our core business and the significant improvements we've driven in our KPIs over the last few months. Jess.

Thanks, Nick. I'm pleased to join today's call. As Nick mentioned, we're excited about the opportunities ahead with BeelineEquity. At the same time, we remain focused on methodically strengthening our core mortgage business. Let me highlight a few key metrics that underscore our progress. We delivered strong growth across our core operating metrics. Mortgage originations increased to $84.7 million, up 44% from $59 million in the fourth quarter of last year. The average revenue per loan increased 31% and the average cost per loan decreased 18% quarter-over-quarter. This trend continued into January 2026, and we expect continued improvements in loan level economics as we move through the year. In addition to the top line momentum, there are meaningful improvements in our operational efficiency across the platform.

Lead to application time was cut by more than half from 1.1 days in 2024 to half a day. We are reaching our customers more quickly through better workflows and Bob, our proprietary AI agent. Cycle time from processing to clear to close also improved from an average of 22 days in 2024 to 18 days in 2025 on larger unit volume. Lock to close conversions increased from 46%-55.1%, a 20% improvement from 2024 to 2025. These operational gains reflect the strength of our digital-first AI-driven platform, which continues to streamline the customer experience while driving faster cycle times and higher conversion. Importantly, we are increasing both volume and revenue per loan with modest increase in headcount, which is translating into operational leverage. Looking ahead to 2026, our priorities are clear.

Continue growing our core mortgage business with a strong focus on efficiency and revenue per loan. Scale BeelineEquity in a disciplined manner while maintaining a prudent risk posture. Expand our SaaS and AI capabilities. Drive revenue growth across both volume and margin. Progress towards positive operating cash flow. Our objective is straightforward: to strengthen Beeline's financial profile while building a scalable platform capable of delivering sustainable, long-term, high-margin growth and providing an exceptional customer experience. With that, I'll turn it over to Chris Moe, our CFO, to walk through the financials.

Thanks, Jess. Starting with the fourth quarter, total net revenues were $2.5 million, an increase of 127% compared to $1.1 million in the fourth quarter of 2024. Sequentially, the fourth quarter increased by 8.3%. Gains on loan sales and loan origination fees increased both sequentially and year-over-year as we continue to scale the platform. Title fees were up 91% year-over-year and effectively flat sequentially as this business continues to generate stable and predictable revenue streams. We invested considerable resources to support our growth. Compensation, commissions, and benefits increased by $5.2 million. The majority of the compensation expenses were non-cash, stock-based compensation expense of $2.9 million.

General and administrative expenses were up $2.4 million, primarily related to non-cash stock-based compensation expense of $1.4 million. As a result, our loss from operations was $8 million, compared to $4.1 million in the fourth quarter last year and $2.9 million in the third quarter of 2025.

Fully half of the loss from operations was non-cash stock-based compensation, and total non-cash items comprised approximately $5 million of the $8 million operating loss. Adjusted EBITDA was a -$3.4 million in the quarter compared to a -$3.2 million in the fourth quarter last year and -$2 million in the third quarter of 2025. Let me now shift to the full year results. Since 2024 reflects the sub-period October 8 to December 31, 2024, I will only address full year 2025. Total revenue is $7.8 million, comprised of gains on loan sales of $5.4 million, loan origination fees of $1 million, and title fees of $1.4 million. These results reflect strong growth across our core businesses and continued momentum exiting the year.

Total operating expenses were $27.3 million, with almost 30% related to non-cash expenses. Net loss was $31.5 million and full-year adjusted EBITDA was -$11.8 million. From a cost perspective, we maintain discipline while continuing to invest in growth. Importantly, we are beginning to see operating leverage as revenue scales faster than fixed costs. Turning to the balance sheet and comparing December 31, 2025 with December 31, 2024, we ended the year with cash balances higher by more than $2 million compared to 2024, supported by equity raises and improved capital structure. We significantly reduced debt during the year and today the company is debt-free outside of our warehouse lines which are directly tied to loan production. Speaking of warehouse lines, we quintupled our warehouse capacity over the course of 2025.

Based on our current growth rates, we expect to increase our warehouse lines this summer to support continued origination growth. Accounts payable and working capital metrics improved meaningfully, reflecting tighter operational execution. AP was reduced by over $1 million and working capital improved by $9.2 million. Total equity increased by $4.6 million year-over-year, driven by capital raises and restructuring. Turning to cash flow. For the full year, cash used in operations was $21.4 million, as expected for a company in a scaling phase. Shifting to 2026, the heavy lifting on our platform is now complete. We are focused on variable spending to support growth. As a result, we expect our cash burn to decrease in the first quarter of 2026. We continue to prudently utilize our ATM facility and believe we have sufficient resources to fund our near-term growth plans.

Investing cash flow of $1.1 million reflects continued investment in technology and platform development. Financing cash flow was $24.9 million, supporting both growth and balance sheet strengthening. To summarize, we delivered strong revenue growth. We improved operating efficiency. We materially strengthened the balance sheet and we're entering 2026 with improving cash flow dynamics. As we scale revenue, particularly from higher margin capital-light initiatives like BeelineEquity, we expect continued improvement in both profitability and cash flow. With that, I'll turn it back to Nick.

Before we begin the Q&A session, I'd like to make three points. First, we've built a platform that combines mortgage origination, title, AI, and fractional equity that allows us to serve a segment of the market that is underserved by traditional mortgage lenders. Second, we are adding a more capital-light fee-based revenue stream, which we believe can improve both scalability and returns over time. Third, we are increasingly focused on parts of the market where we believe we can build a more unique and durable position supported by our integrated platform and capital-light model.

Our priorities are clear. Grow the business, scale new revenue streams in a disciplined way, and continue improving cash flow. If we continue to execute on these priorities, we believe the financial profile of the company will continue to strengthen. Thank you for your time and your continued interest in Beeline. I'd now like to turn the call back over to the operator for Q&A.

Thank you. We will now begin the question-and-answer session. To ask a question, you may press star then one on your touchtone phone. If you are using a speakerphone, please pick up your handset before pressing the keys. If at any time your question has been addressed and you would like to withdraw your question, please press star and then two. At this time, we will pause momentarily to assemble the roster. The first question will come from Michael Legg with Ladenburg. Please go ahead.

Thanks. Good afternoon. Congrats on the quarter. Wanted to kind of talk about, you mentioned a $100 million run rate over the next couple of years. Can you talk about whether that's with the current, you know, three business lines of digital mortgage origination, AI, and the equity ownership pieces, or do you foresee adding any more legs to the stool? Thanks.

Hey, Michael, it's Nick. Thank you for that. Yes, I see us focusing on the transactions that we discussed on the mortgage origination side and on the BeelineEquity side. There's tremendous opportunity. There's tremendous TAM. We are an early adopter of the blockchain in the BeelineEquity piece. I see that revenue coming from the two channels of Beeline origination primarily and BeelineEquity.

Great. Okay. Then, you know, you mentioned obviously fee-based, volume-based business, but interest rate, you know, obviously is correlated with the real estate market if rates come down. Could you just kinda talk about what type of environment you might see for your products?

Chris, you wanna take that?

Yeah. I think the question is how exposed are we to interest rates? Is that fair to say, Michael?

Yeah. How, you know, industry fee-based, volume, etc.

Yeah. Obviously our core mortgage business is still influenced by rates which have, by the way, ticked up in the last 30 days or so ever since the war started. But two things I think are worth stressing that are changing with Beeline. First, we're improving our efficiency, particularly in the sales funnel. Like each step of the sales funnel, if you tighten it up like 2%, 3%, 4%, 5%, by the time you get to the bottom of it could be like 20% better. The ratio of our ad spend to our revenue is one of the things we look at heavily. And then also revenue per loan, which as Jess said earlier, has been growing.

It used to be sort of in the low twos, meaning 220,000, and then now it's sort of averaging around 300,000, and that helps offset volume variability. Second, as Nick alluded to earlier, and more importantly, we've expanded into transaction-based fee-driven revenue streams, which are less dependent on rates or are frankly, I think in the case of BeelineEquity, independent of rates. Overall, over time, that should reduce our sensitivity to interest rate increases.

Yeah. Let me add something too as well, if you don't mind. Look, when you think about the $100 million run rate, it's about 700 transactions per month, give or take, along with our title business. When you think about that and you think about how big the addressable market is for BeelineEquity, a $39 trillion market opportunity with not much competition and creating liquidity for a class of people that need liquidity, you can start to visualize the opportunity. Then secondly, you know, our loan economics have not been positive. As a result of that, our appetite to spend on marketing hasn't been as high as it's going to be a little later this year, right?

As a result of that, we see our origination business growing on higher volumes as we continue to put the pedal to the metal in terms of spending more to create more origination volume, and then combining that with our BeelineEquity product, getting to 700 transactions to create the $100 million run rate seems like a very obtainable task.

Great. Just last question. You know, we basically have one day left in the quarter. You mentioned the fourth quarter was sequentially up, I think 8.3%, you said. Are the same trends showing up in the first quarter? Can you comment at all on the direction we're seeing?

Yeah, let me take that, Nick. Obviously I gotta be careful about giving any guidance, but I think I'm not gonna lecture you. I think, Mike, you recognize that this is a somewhat seasonal business. Beeline, I would say, is less seasonal than the average mortgage banker. The fourth quarter tends to be soft just because on the purchase side, people aren't usually closing on houses in November. We have basically a 12-week quarter that three or four weeks are zipped out of it because of the holidays. Typically, if you know, for someone that's running more or less level, the fourth quarter will be down. The fourth quarter was up eight point something percent. First quarter will be up yet again, but I'm not gonna say the amount. It's not 8.7%.

Great. Thank you. Appreciate it.

You're welcome.

Again, if you have a question, please press star and then one. The next question will come from Jacob Frank, Private Investor. Please go ahead.

Hey, Nick. Hey, Chris. Great results. Just wanted to check, are we on track to be cash flow positive as a group, not just the lending entity? Because the last update was in October 2025. I just wanted to ask about the Series A redemption. It looked like a very friendly deal for the company. I don't know, like, what's the color, what's the background, what motivated the investors to offer these terms? Thank you.

Yeah, I'll take the first part and then I'll let Chris. Go ahead. Go ahead, Chris.

Well, I was gonna say, I'll take the first question and you can take the second one, but we can play around as needed. So yeah, thanks for your question. Yeah. Yes, we're very much on trend. You know, our results for last year, you know, were clouded both from the investor perspective and also internally just because so much was going on in our birthing process of becoming a public company. Almost all that static is behind us. We're very focused on operations and I'm confident that the lines will cross in a positive way in the near future. More than that, I can't say for obvious reasons, but to answer your question, we're very much on track, if not, you know, above the expected trajectory.

Nick, you wanna comment on the Series A?

Yeah. What was the question on the Series A? I'm sorry.

Yes. The question is, what's the background and what motivated the investors to offer the terms? Because the issue price actually went up, so I believe we saved on issuance of shares.

The Series A has now been retired. Basically, the way that series worked was we had the holders had the right to convert at $1.75, and we had the right to buy the shares back at $2. As the war broke out, right, we were uncertain of how we wanted to handle that with a, you know, a pending date of the end of May for the holder to convert. We went to the holder and we negotiated a $2.25 conversion. We issued the shares and put that to bed. We've got very limited preferred overhang that's currently in the cap table with the Series A currently completely retired.

Got it. That's amazing. I do have one last question. I know that we have the at-the-market program, and I understand the potential uses could be blockchain investments, acquisitions and other things, right? How is the management thinking about the overall capital allocation strategy and how is the money-

Yeah.

being spent? Because I also note that the Series B is still costing us 6% annually, so any thoughts around it?

Yeah. I think the question is how do we see potential acquisitions going forward? Is that the root of the question?

No. It's like, how do we decide on how we spend the money? Because I believe we have so many areas we can spend on hiring, blockchain investments, could even potentially retiring the, I believe, the last remaining preferred Series B.

Yeah. Got it. Look, our primary focus is spending our money to grow our revenue as profitably as we possibly can. As mentioned on this call, right, we're in a position now where that spend is not as great as it once was in developing and building the platform and then leveraging the AI to be even more productive. On a going forward basis, you know, that's where we're gonna put our dollars. It's a lot fewer dollars than what we've had to put toward in the past. You know, as it relates to, I think you mentioned acquisitions, you know, I mean, look, we're gonna look at potential acquisitions at some point next year.

There's a lot of opportunity to potentially, A, consolidate or, B, pick up a company that can drive business to our platform. As of right now, the dollars we're gonna spend are gonna be driving transactions, and that would include, you know, forming partnerships potentially, with entities that can drive business at the end of the day. There may be some dollars spent in that direction as well.

Okay. Thank you. Wishing all of you all the best.

Thank you very much. We appreciate that. Thank you.

This concludes our question and answer session. I would like to turn the conference back over to Nick Liuzza for any closing remarks.

I wanna thank everyone for their support. You know, we're now in our first year as a public company. The management team, I wanna let everyone know, is completely committed. We are, you know, we sit side by side with our shareholders as every member on this phone is an investor in Beeline with their own hard personal cash, and it goes way beyond the three of us. As we move forward, understand that the decisions we're making are not only for the best of Beeline, but for the shareholders, and we're shareholders as well. We've got our next earnings call in the next 45 days, since this one's a little late in the quarter. We look forward to seeing everyone on that call and sharing our Q1 results. Thank you, everyone.

The conference has now concluded. Thank you for attending today's presentation. You may now disconnect.