Company: IPST
Filing Date: 2025-02-04
Form Type: 424B3
Source: 0001213900-25-010139
Chunk: 43

Company: Heritage Distilling Holding Company, Inc.
Filing Date: 2025-02-04
Form: 424B3
Chunk 43
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 to purchase products from us in the
same frequencies and volumes as they may have done in the past. Additionally, our larger distributors and partners may make orders that
are larger than we have historically been required to fill. Shortages in inventory levels, supply of raw materials or other key supplies
could negatively affect us.

The sales of our products could decrease significantly if we cannot secure and maintain listings in the control states.

In the control states, the state liquor commissions
act in place of distributors and decide which products are to be purchased and offered for sale in their respective states, and at what
prices they will be offered to consumers. Products selected for listing must generally reach certain volumes and/or profit levels to maintain
their listings. Products are selected for purchase and sale through listing procedures that are generally made available to new products
only at periodically-scheduled listing intervals. Products not selected for listings can only be purchased by consumers in the applicable
control state through special orders, if at all. If, in the future, we are unable to maintain our current listings in the control states,
or secure and maintain listings in those states for any additional products we may produce or acquire, sales of our products could decrease
significantly.

The privatization of a control state could adversely impact our sales and our results of operations.

Once products are approved for sale by the state
liquor commission in a control state, the products move through the normal state warehousing, wholesale, distribution and retail sales
channels established under such a system. State owned, managed or regulated stores set the prices for the products and there are rules
and regulations regarding shelf placement, samplings and retail sales to consumers and bars and restaurants. In these markets, the approval
for shelf space and pricing is conducted through the state process. In some control states, there are increasing levels of discussion
about privatization, either because of negative views toward state ownership of the liquor system, the need for states to generate cash
through the one-time sale of assets, or due to other political pressures in those states. Once a state privatizes its liquor system it
creates significant disruption during the transition period towards privatization as distributors need to set up new warehouses and sales
teams and new delivery routes, and bars and restaurants who were required to focus on purchasing only from their local state liquor store
now must navigate a new distribution system, sometimes with new pricing and new taxes. Likewise, if spirits sales move into private stores
and major retail chains, new challenges are created for small or new brands