Company: IPST
Filing Date: 2025-01-27
Form Type: S-1
Source: 0001213900-25-006695
Chunk: 157

Company: Heritage Distilling Holding Company, Inc.
Filing Date: 2025-01-27
Form: S-1
Chunk 157
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 shipments of spirits throughout the year. We also rely upon, and intend to increasingly grow, the wholesale distribution of our products. SGWS, the leading U.S. spirits distributor with an approximately 34.6% market share across the U.S. in 2021, distributes our original mainstream products in Washington, Oregon and Alaska. For the years ended December 31, 2023 and 2022, SGWS represented over 10% of our revenues. In July 2021, we began a distribution arrangement with RNDC, the second largest U.S. spirits distributor with an approximate 20.3% market share in 2021, covering 39 of the 50 states in the U.S. plus Canada. In February 2024, we launched wholesale distribution in Oklahoma through the MillerCoors beer network and added distribution in the third quarter of 2024 in Kansas, Kentucky and portions of Colorado. We supplement the work of our distributors with a direct sales force of individuals assigned to specific sales territories. These individuals manage the relationships with the applicable distributor’s sales teams, who themselves have teams of varying sizes selling products to accounts. This team works directly with retailers and on-premises operators to build demand and support their needs for marketing and other Heritage-specific information. In the nine-month period ended September 30, 2024, we sold approximately 16,521 cases of product through our wholesale channel, a decrease of approximately 18% compared to the 20,081 cases we sold on a wholesale basis in the nine-month period ended September 30, 2023, while seeing a slight decrease in our wholesale revenue of less than $7,000 in the nine-month period ended September 30, 2024 to $1,299,067 compared to wholesale revenue of $1,305,940 in the nine-month period ended September 30, 2023, a decrease of 0.5%. Such a small change in wholesale revenue can be attributed to a single day’s wholesale orders being shifted into or out of the quarter based on the timing of order fulfillment and when orders are picked up in the month. Of note were some significant wholesale orders that we shipped, and for which we booked the associated revenue, in June 2023 to a large retail chain customer. This year, similar orders were set up for July shipments, which caused those orders and their associated revenue to impact third quarter results. We believe this percentage increase in wholesale revenue, with a combined net absolute spread of 17.5