Company: IPST
Filing Date: 2025-02-04
Form Type: 424B3
Source: 0001213900-25-010139
Chunk: 315

Company: Heritage Distilling Holding Company, Inc.
Filing Date: 2025-02-04
Form: 424B3
Chunk 315
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 and stockholders’
deficit, raise substantial doubt about its ability to continue as a going concern. During the year ended December 31, 2023, the Company
incurred a net loss of approximately $36.8 million (of which approximately $23.0 million of the net loss stemmed from the increase in
fair value of certain convertible notes and warrants) and reported net cash used in operations of approximately $8.3 million. On December
31, 2023, the accumulated deficit was approximately $74.8 million and the stockholders’ deficit was approximately $43.4 million.
Excluding the approximately $23.0 million from the 2023 increase in fair value ($20.7 inception to date increase in fair value) of the
aforementioned convertible notes and warrants: the Company would have incurred a 2023 net loss of approximately $13.8 million; reported
net cash used in operations of approximately $8.5 million; at December 31, 2023, the accumulated deficit would have been approximately
$51.8 million and the stockholders’ deficit would have been approximately $20.4 million. In connection with these consolidated financial
statements, management evaluated whether there were conditions and events, considered in the aggregate, that raise substantial doubt about
the Company’s ability to meet its obligations as they become due within one year from the date of issuance of these financial statements.
Management assessed that there were such conditions and events, including a history of recurring operating losses, and negative cash flows
from operating activities, and significant current debt obligations. The financial statements do not include any adjustments that might
result from the outcome of this uncertainty.

As of December 31, 2023, the Company believes its
current cash balances coupled with anticipated cash flow from operating activities may not be sufficient to meet its working capital requirements
for at least one year from the date of the issuance of the accompanying consolidated financial statements. The Company has issued an aggregate
principal amount of $22,146,023 in unsecured 2022 and 2023 convertible notes, plus an additional $2,975,000 in the current round of Whiskey
Special Ops 2023 Notes (See Notes 5 and 16) to various new and existing investors including a related party, which together, have generated
net cash proceeds of $19,305,000 through December 31, 2023.

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Heritage Distilling Holding Company, Inc