Company: IPST
Filing Date: 2025-10-16
Form Type: S-1/A
Source: 0001213900-25-099309
Chunk: 127

Company: Heritage Distilling Holding Company, Inc.
Filing Date: 2025-10-16
Form: S-1/A
Chunk 127
---
 reflected at the market price of $IP tokens and the aggregate change in the fair value of our treasury of $IP tokens will be reflected as a gain or loss in our statement of operations. For each reporting period, our statement of operations will reflect a net gain or loss commensurate with the respective change in market value of a $IP token (across the number of $IP tokens that we hold in our treasury). Accordingly, assuming the number of $IP tokens we hold remains constant at approximately 53million, every $1.00 increase in the market value of a $IP token will 71 represent a gain of approximately $53million that we must recognize; and, conversely, every $1.00 decrease in the market price of a $IP token will represent a loss of approximately $53million that we must recognize. The more the $IP token price increases or decreases in the market, the greater the gain or loss we will be required to report, and depending on market conditions from quarter to quarter, we could see significant swings in gains or losses simply due to marking the value of the $IP tokens we hold to their market value. Pricing, Product Cost and Margins To date, most of our revenue has been generated by retail sales of our spirits in our retail tasting rooms and through our eCommerce platform. Having completed the construction of our existing production facilities and contracted with established distributors, we turned our focus to evaluating our production capacity, our success in developing award -winningproducts, and the growth of our wholesale channel. Going forward, we expect to sell our products in a variety of vertical industry markets in partnership with our distributors across states and geographic regions. Pricing may vary by region due to market -specificdynamics and various layers of taxes applied by the states at the different steps of distribution and retail sales. As a result, our financial performance will depend, in part, on the mix of our sales in different markets during a given period and our ability to scale efficiently. We have experienced inflation in some of our raw inputs, particularly in grains, bottles, cans and barrels. Some of these price increases began to moderate beginning in the second half of 2021, such as in grain. Grain prices increased due to supply chain issues associated with the war in Ukraine and the increased input cost of fertilizers tied to high natural gas prices. Grain prices have moderated as some additional sources of supply opened up and the market price for grain has come down from its recent historic highs. Aluminum prices for cans and bottles increased in 2021