Beeline Q2 2026 Earnings Report

Beeline EPS Results

• Actual EPS: -$0.13
• Consensus EPS: N/A
• Beat/Miss: N/A
• One Year Ago EPS: N/A

Beeline Revenue Results

• Actual Revenue: N/A
• Expected Revenue: N/A
• Beat/Miss: N/A
• YoY Revenue Growth: N/A

Beeline Announcement Details

• Quarter: Q2 2026
• Date: 8/14/2026
• Time: After Market Closes
• Conference Call Date: Thursday, August 13, 2026
• Conference Call Time: 5:00PM ET

Beeline (NASDAQ:BLNE) is a mortgage fintech company that provides a digital, AI-powered lending and title platform designed to streamline the home loan process. Headquartered in Providence, Rhode Island, Beeline aims to make mortgages simpler and faster by combining technology with an end-to-end approach across origination and title services. The company focuses on improving efficiency and transparency for homebuyers and homeowners, supporting broader access to financial flexibility through property ownership.

Beeline Q2 2026 Earnings Call Transcript

Key Takeaways

• Positive Sentiment: Revenue rose 57% year over year to $2.6 million, while net loss improved 24% sequentially and adjusted EBITDA improved 14% from Q1. Management also reported lower operating expenses and quarterly cash burn of $1.7 million.
• Positive Sentiment: Beeline shifted its lending mix toward higher-margin bank-statement and DSCR loans, with overall margins up 10% from Q1 and revenue per loan up 4%. July reportedly delivered the company’s highest-ever margin and lowest monthly cash burn in years, although management provided no formal guidance.
• Positive Sentiment: The acquisition of the remaining interest in MagicBlocks made Beeline’s AI sales and workflow technology fully in-house, with plans to expand automation into underwriting, document handling, and closing operations to improve conversion and reduce costs.
• Positive Sentiment: The proposed all-stock TYTL transaction could diversify Beeline beyond traditional mortgages through Beeline Equity, which management estimates may generate roughly three times the revenue per transaction and be less sensitive to interest rates. TYTL would also contribute a digital-securities treasury, but the opportunity remains dependent on due diligence, definitive agreements, fairness and valuation opinions, and shareholder approval.
• Negative Sentiment: Despite sequential improvement, Beeline remains loss-making, with a $4.0 million quarterly net loss, a $4.5 million operating loss, and only $1.4 million of cash and cash equivalents at quarter-end. The company also raised short-term capital after quarter-end, including a 9% 60-day promissory note and a $500,000 convertible note, highlighting ongoing liquidity and financing risks.

Presentation

[Operator]

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.

[Tiffany Milton, Chief Accounting Officer at Beeline Holdings, Inc.]

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.

[Tiffany Milton, Chief Accounting Officer at Beeline Holdings, Inc.]

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.

[Tiffany Milton, Chief Accounting Officer at Beeline Holdings, Inc.]

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.

[Nicholas Liuzza, CEO at Beeline Holdings, Inc.]

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.

[Nicholas Liuzza, CEO at Beeline Holdings, Inc.]

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.

[Nicholas Liuzza, CEO at Beeline Holdings, Inc.]

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.

[Nicholas Liuzza, CEO at Beeline Holdings, Inc.]

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.

[Nicholas Liuzza, CEO at Beeline Holdings, Inc.]

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.

[Nicholas Liuzza, CEO at Beeline Holdings, Inc.]

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.

[Nicholas Liuzza, CEO at Beeline Holdings, Inc.]

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.

[Nicholas Liuzza, CEO at Beeline Holdings, Inc.]

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.

[Jess Kennedy, COO at Beeline Holdings, Inc.]

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.

[Jess Kennedy, COO at Beeline Holdings, Inc.]

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.

[Jess Kennedy, COO at Beeline Holdings, Inc.]

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.

[Jess Kennedy, COO at Beeline Holdings, Inc.]

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.

[Jess Kennedy, COO at Beeline Holdings, Inc.]

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.

[Chris Moe, CFO at Beeline Holdings, Inc.]

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.

[Chris Moe, CFO at Beeline Holdings, Inc.]

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.

[Chris Moe, CFO at Beeline Holdings, Inc.]

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%.

[Chris Moe, CFO at Beeline Holdings, Inc.]

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.

[Chris Moe, CFO at Beeline Holdings, Inc.]

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%.

[Chris Moe, CFO at Beeline Holdings, Inc.]

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.

[Chris Moe, CFO at Beeline Holdings, Inc.]

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.

[Chris Moe, CFO at Beeline Holdings, Inc.]

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.

[Operator]

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.

[Calvin Seto, Analyst at Clear Lake]

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.

[Calvin Seto, Analyst at Clear Lake]

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?

[Chris Moe, CFO at Beeline Holdings, Inc.]

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.

[Calvin Seto, Analyst at Clear Lake]

Got it. Also a follow-up, right?

[Nicholas Liuzza, CEO at Beeline Holdings, Inc.]

What's that?

[Calvin Seto, Analyst at Clear Lake]

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?

[Nicholas Liuzza, CEO at Beeline Holdings, Inc.]

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.

[Nicholas Liuzza, CEO at Beeline Holdings, Inc.]

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

[Calvin Seto, Analyst at Clear Lake]

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?

[Chris Moe, CFO at Beeline Holdings, Inc.]

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.

[Chris Moe, CFO at Beeline Holdings, Inc.]

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.

[Chris Moe, CFO at Beeline Holdings, Inc.]

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.

[Nicholas Liuzza, CEO at Beeline Holdings, Inc.]

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.

[Chris Moe, CFO at Beeline Holdings, Inc.]

Yeah.

[Calvin Seto, Analyst at Clear Lake]

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?

[Jess Kennedy, COO at Beeline Holdings, Inc.]

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.

[Calvin Seto, Analyst at Clear Lake]

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

[Jess Kennedy, COO at Beeline Holdings, Inc.]

Sure. Yeah.

[Operator]

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

[Matthew Campbell, Analyst at Laridae Capital]

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?

[Nicholas Liuzza, CEO at Beeline Holdings, Inc.]

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.

[Nicholas Liuzza, CEO at Beeline Holdings, Inc.]

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.

[Matthew Campbell, Analyst at Laridae Capital]

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?

[Jess Kennedy, COO at Beeline Holdings, Inc.]

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.

[Jess Kennedy, COO at Beeline Holdings, Inc.]

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.

[Chris Moe, CFO at Beeline Holdings, Inc.]

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

[Matthew Campbell, Analyst at Laridae Capital]

Well, you're not sitting still there.

[Nicholas Liuzza, CEO at Beeline Holdings, Inc.]

Thank you, Matt.

[Matthew Campbell, Analyst at Laridae Capital]

Appreciate answering the questions. Take care.

[Nicholas Liuzza, CEO at Beeline Holdings, Inc.]

Thanks, Matt.

[Jess Kennedy, COO at Beeline Holdings, Inc.]

Thanks, Matt.

[Operator]

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.

[Nicholas Liuzza, CEO at Beeline Holdings, Inc.]

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.

[Nicholas Liuzza, CEO at Beeline Holdings, Inc.]

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.

[Operator]

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

Participants

Executives

• Tiffany Milton, Chief Accounting Officer
• Nicholas Liuzza, CEO
• Jess Kennedy, COO
• Chris Moe, CFO

Analysts

• Calvin Seto, Analyst at Clear Lake
• Matthew Campbell, Analyst at Laridae Capital