Company: IPST
Filing Date: 2025-11-18
Form Type: 10-Q
Source: 0001788230-25-000175
Chunk: 306

Company: Heritage Distilling Holding Company, Inc.
Filing Date: 2025-11-18
Form: 10-Q
Item: Part II, Item 8
Chunk 306
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 we expect to see our going concern issues resolved as we would have the ability to demonstrate both access to liquid assets to cover expenses and growth and the ability to generate significant income at high margin on a regular basis in excess of expenses as they come due. 

Line of Credit and Debt Agreements

In April 2020, we were granted a loan under the Paycheck Protection Program (“PPP”) offered by the Small Business Administration (the “SBA”) under the Coronavirus Aid, Relief and Economic Security Act (the “CARES Act”), section 7(a)(36) of the Small Business Act for $3,776,100. The proceeds from the PPP loan could only be used to retain workers 

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and maintain payroll or make mortgage interest, lease and utility payments and all or a portion of the loan could be forgiven if the proceeds are used in accordance with the terms of the program within the eight or 24-week measurement period. The loan terms required the principal balance and 1% interest to be paid back within two years of the date of the note. In June 2021, our bank approved forgiveness of the loan of $3,776,100. During the year ended of December 31, 2021, the forgiveness was partially rescinded by the SBA and we recognized $1,506,644 as other income in the consolidated statements of operations, resulting in $2,269,456 in PPP debt. Under the terms of the PPP loan, we have also recorded interest on the PPP loan at the rate of 1%, for a total of $124,229 as of September 30. We are currently in the process of disputing a portion if not all of the difference. The terms of the agreement state that we have 18-24 months to repay the PPP loan. Following the date of the forgiveness, the remaining principal balance of the PPP loan of $2,269,456 is expected to be repaid in the next 12 months with our general assets.

As part of our acquisition of Thinking Tree Spirits we inherited a HUD/City of Eugene loan with a balance of $389,875. We have since paid down $85,058 of that loan, leaving a balance of $304,817 at September 30, 2025. That loan is scheduled to be paid off by May 1, 2028 unless paid off sooner. It carries an annual interest rate of 5%

Cash Flows

The following table sets forth a summary of cash flows for the periods