Company: IPST
Filing Date: 2025-02-04
Form Type: 424B3
Source: 0001213900-25-010139
Chunk: 41

Company: Heritage Distilling Holding Company, Inc.
Filing Date: 2025-02-04
Form: 424B3
Chunk 41
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 of beverage alcohol could decrease sales and consumption of alcohol and thus the demand for our products. This
could, in turn, significantly decrease both our revenues and our revenue growth, causing a decline in our results of operations.

Due to the three-tier alcohol beverage distribution system in the United States, we are heavily reliant on our distributors that resell alcoholic beverages in all states in which we do business. Our inability to obtain distribution in some states, or a significant reduction in distributor demand for our products, would materially and adversely affect our sales and profitability.

Due to regulatory requirements in the United States,
we sell a significant portion of our craft spirits to wholesalers for resale to retail accounts. A change in the relationship with any
of our significant distributors could harm our business and reduce our sales. The laws and regulations of several states prohibit changes
of distributors, except under certain limited circumstances, making it difficult to terminate or otherwise cease working with a distributor
for poor performance without reasonable justification, as defined by applicable statutes. Any difficulty or inability to replace a distributor,
poor performance of our major distributors or our inability to collect accounts receivable from our major distributors could harm our
business. In addition, an expansion of the laws and regulations limiting the sale of our spirits would materially and adversely affect
our business, results of operations and financial results. There can be no assurance that the distributors and accounts to which we sell
our products will continue to purchase our products or provide our products with adequate levels of promotional support, which could increase
competitive pressure to increase sales and marketing spending and could materially and adversely affect our business, results of operations
and financial results.

Failure of third-party distributors upon which we rely could adversely affect our business.

We rely heavily on third-party distributors for
the sale of our products to retailers, restaurants, bars, hotels, casinos, entertainment venues and other accounts. We expect sales to
distributors to represent an increasingly substantial portion of our future net sales as we continue to grow our network of wholesale
distributors. Consolidation among distributors or the loss of a significant distributor could have a material adverse effect on our business,
financial condition and results of operations. Our distributors may also provide distribution services to competing brands, as well as
larger, national or international brands, and may be to varying degrees influenced by their continued business relationships with other
larger beverage, and specifically, craft spirits companies. Our independent distributors may be influenced by a large competitor if they
rely on that competitor for a significant portion of their sales.