Company: IPST
Filing Date: 2025-08-14
Form Type: 10-Q
Source: 0001788230-25-000126
Chunk: 264

Company: Heritage Distilling Holding Company, Inc.
Filing Date: 2025-08-14
Form: 10-Q
Item: Part II, Item 8
Chunk 264
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407,000 $(10,328,000)$8,859,000 Add (Deduct):Income Tax3,000 9,000 3,000 9,000 Interest Expense595,000 635,000 1,119,000 1,236,000 Depreciation and Amortization274,000 $335,000 570,000 655,000 EBITDA$(6,423,000)$9,386,000 $(8,636,000)$10,759,000 Change in fair value of convertible notes— (9,616,000)— (9,045,000)Change in fair value of warrant liabilities— (1,275,000)— (1,705,000)Investment (Gain) Loss— — — (3,421,000)Adjusted EBITDA$(6,423,000)$(1,962,000)$(8,636,000)$(3,869,000)

65

Liquidity and Capital Resources

We have prepared our condensed consolidated financial statements assuming we will continue as a going concern. Since our inception, we have incurred net losses and experienced negative cash flows from operations as we have invested in equipment, location buildout, inventory buildout (including laying down barrels of whiskey for aging) and marketing to grow our presence and brands. To date, our primary sources of capital have been private and public placements of equity securities, term loans, and convertible debt. During the six months ended June 30, 2025 and 2024, we had net income / (loss) of approximately $(10,328,000) and $8,859,000, respectively (of which, approximately $0 and $14,628,000, respectively, stemmed from the (increase)/decrease in fair value of certain convertible notes, warrants and contingencies, and gain on investment). We expect to incur additional losses and higher operating expenses for the foreseeable future as we continue to invest in inventory, assets, working capital and otherwise in the growth of our business.

At June 30, 2025, we had outstanding aged payables to vendors in the aggregate amount of approximately $6,881,000, inclusive of accrued amounts to service providers who were providing services for us related to our IPO. We reached agreements with most of these vendors, including the vendors with some of the largest outstanding invoices, to be paid soon after the IPO or periodically