Company: IPST
Filing Date: 2025-02-04
Form Type: 424B3
Source: 0001213900-25-010139
Chunk: 150

Company: Heritage Distilling Holding Company, Inc.
Filing Date: 2025-02-04
Form: 424B3
Chunk 150
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 to net cash used in operating activities were approximately $25,425,000 and $970,000 in the
respective periods.

The approximately $25,425,000 of non-cash adjustments
for the years ended December 31, 2023 consisted primarily of approximately: $22,765,000 of loss on change in fair value of convertible
notes; a $240,000 loss on change in fair value of warrant liabilities; $1,430,000 of depreciation expense; $493,000 of non-cash amortization
of operating lease right-of-use assets; and, $435,000 of non-cash interest expense primarily associated with our notes payable.

The approximately $970,000 of non-cash adjustments
in the year ended December 31, 2022 included approximately: $1,513,000 of depreciation expense; $377,000 of non-cash amortization
of operating lease right-of-use assets; $303,000 of issuance of warrants; $2,118,000 of gain on change in fair value of convertible notes;
$148,000 of gain on change in fair value of warrant liabilities; and $918,000 of non-cash interest expense primarily associated with our
notes payable.

Net Cash Used in Investing Activities

During the nine months ended September 30, 2024
and 2023, net cash used in investing activities was approximately $27,000 and $174,000, respectively. and were related primarily to the
purchase of property and equipment, net of minor amounts related to cash purchased in conjunction with the acquisition of Thinking Tree
Spirits and sales of assets. During the years ended December 31, 2023 and 2022, net cash used in investing activities was approximately
$24,000 and $614,000, respectively. Investing activities during the years ended December 31, 2023 and 2022 were related primarily
to the purchase of property and equipment, net of minor amounts related to sales of assets.

Net Cash Used in Financing Activities

During the nine months ended September 30, 2024
and 2023, net cash provided by financing activities was approximately $6,210,000 and $6,047,000, respectively. The cash proceeds received
in the nine months ended September 30, 2024 were primarily comprised of proceeds from the sale of convertible notes of approximately
$3,656,000 (of which approximately $1,433,000 was from a related