Company: IPST
Filing Date: 2025-02-04
Form Type: 424B3
Source: 0001213900-25-010139
Chunk: 171

Company: Heritage Distilling Holding Company, Inc.
Filing Date: 2025-02-04
Form: 424B3
Chunk 171
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 16,521 cases of product through our wholesale channel, a decrease of approximately 18% compared
to the 20,081 cases we sold on a wholesale basis in the nine-month period ended September 30, 2023, while seeing a slight decrease in
our wholesale revenue of less than $7,000 in the nine-month period ended September 30, 2024 to $1,299,067 compared to wholesale revenue
of $1,305,940 in the nine-month period ended September 30, 2023, a decrease of 0.5%. Such a small change in wholesale revenue can be attributed
to a single day’s wholesale orders being shifted into or out of the quarter based on the timing of order fulfillment and when orders
are picked up in the month. Of note were some significant wholesale orders that we shipped, and for which we booked the associated revenue,
in June 2023 to a large retail chain customer. This year, similar orders were set up for July shipments, which caused those orders and
their associated revenue to impact third quarter results. We believe this percentage increase in wholesale revenue, with a combined net
absolute spread of 17.5% between the (18%) and (.05%), was a contributing factor to our significant increase in our overall gross margin
for the nine-month period ended September 30, 2024 compared to the nine-month period ended September 30, 2023, and further demonstrates
that our migration away from lower-margin spirits to higher margin spirits is working. This improvement has the added value of allowing
us to generate more revenue while using less cash in the production of fewer units of higher-margin products, which we believe will assist
us in planning and forecasting as we work to scale and grow around these activities.

In 2023, we sold approximately 23,738 cases of product
through our wholesale channel, a year-over-year increase of approximately 3.2% over the approximately 23,000 cases we sold through wholesale
distribution in 2022, while preparing to transition our focus toward higher-margin products and away from very-low-margin and quasi-private
label products for a select national spirits retailer.

<div align='center'>102</div>

To achieve our growth objective of increasing wholesale
sales and revenue, we recently hired a national sales executive to work directly with our distributors and key accounts to gain greater
focus and execution. In the U.S., liquor sales in approximately 17 states are controlled by state governments (such states