Company: IPST
Filing Date: 2025-02-04
Form Type: 424B3
Source: 0001213900-25-010139
Chunk: 132

Company: Heritage Distilling Holding Company, Inc.
Filing Date: 2025-02-04
Form: 424B3
Chunk 132
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 result of producing bulk spirits under contract for third parties and royalties from spirits sales under the new
TBN model.

The approximately $246,000 decrease in net sales
of services period over period included:

|                        | Services Sales | Years Ended December 31, 
 (rounded to $000’s)      |      2023 |     |   |      2022 |     |   |   Change |   |
|:-----------------------|:---------------|:-------------------------|----------:|:----|:--|----------:|:----|:--|---------:|:--|
| Third Party Production |                | $                        | 1,094,000 |     | $ | 1,172,000 |     | $ |  (78,000 | ) |
| Retail Services        |                |                          | 1,387,000 |     |   | 1,642,000 |     |   | (255,000 | ) |
| Consulting and Other   |                |                          |   354,000 |     |   |   267,000 |     |   |   87,000 |   |
|                        |                | $                        | 2,835,000 |     | $ | 3,081,000 |     | $ | (246,000 | ) |

| ● | The approximately $78,000 decrease in third-party production                                                                                 
 resulted from the ending of a modest third-party bottling contract. The bulk of our revenue in this category included increased production   
 services revenue related to a contract we have to produce a world-class gin for a large international spirit brand owner; increased contract 
 bottling services; and increased third-party barrel storage revenues. We expect our barrel storage revenue to continue to increase as        
 more third-party barrels are put into our warehouse. Our gin production contract ended in early 2024 as we shifted our focus toward putting  
 our resources into higher margin activities under our own core brands and programs and reducing risks associated with hourly labor in        
 certain markets.                                                                                                                             |

| ● | The approximately $255,000 decrease in retail services sales                                                                            
 was primarily due to decreases in Cask Club and My Batch sales; tastings sales; and other retail services revenue, primarily associated 
 with the closure of our Ballard, WA tasting room in mid-March 2023, with offsetting increases in retail cocktail sales;                 |

| ● | The approximately $87,000 increase in consulting and other                                                                             
 revenues included increases