Company: IPST
Filing Date: 2025-12-23
Form Type: 424B3
Source: 0001213900-25-125341
Chunk: 200

Company: Heritage Distilling Holding Company, Inc.
Filing Date: 2025-12-23
Form: 424B3
Chunk 200
---
 sampling, and will generate sales of finished, intermediate and bulk spirits depending on location, equipment and market. Importantly, because these premium spirits will be produced locally, we believe the TBN will promote the positioning of our brands as local and regional. We expect that, as the brands grow and the TBN footprint expands, there will be an important synergy with increased adoption and growth through our wholesale channels in the regions where the TBN locations are driving trial and awareness. Similarly, as demand for our products grow through our wholesale channels, there should be a positive effect on the demand for the products produced by our tribal partners. 117 On October23, 2025, in response to coming lease increases, recently -enactedstate tax increases on small businesses and pending wage increases, we announced that we would close our five owned and operated tasting rooms in Washington and Oregon effective December31, 2025, along with the transition of production to third -partycontract producers beginning in the first quarter of 2026. These actions, along with a significant reduction in headcount and overhead, are expected to result in significant reductions in net expenses with a resulting positive impact to net income. The elimination of in -houseproduction and the eventual termination of leases associated with operations is also expected to greatly reduce our unabsorbed overhead expense for every case of our product sold, thereby greatly improving margins. We will continue to sell spirits through distributors and direct to consumers online, and, through our TBN sales channel, we will continue to work with Native American tribes to license the Heritage Distilling Company brand and our products for production and sale by tribes in HDC -brandedtasting rooms in or near their casino properties. Market We believe we are well positioned to grow as the overall spirits market continues its growth at the expense of beer and wine. Recent studies demonstrate that the spirits market is growing annually in terms of total alcohol volume and as a percentage share of alcohol dollars. According to drink market analysis firm IWSR, a leading source of data and intelligence in the alcoholic beverage market, spirits have gained market share among other alcoholic beverages continuously since 1998 (23 years), as consumers trend away from beer and wine into spirits. From 2000 to 2023, the market share of spirits by value increased nearly 13 percentage points, from 29% to 42%, according to a 2024 Distilled Spirits Council of the United States (“DISCUS”) report, an increase in total dollar value of $11.7 billion. The same report