Company: IPST
Filing Date: 2025-02-04
Form Type: 424B3
Source: 0001213900-25-010139
Chunk: 37

Company: Heritage Distilling Holding Company, Inc.
Filing Date: 2025-02-04
Form: 424B3
Chunk 37
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 from vendors for unpaid invoices, which could materially affect our business, results of operations, financial condition or liquidity.

We have accrued sums of accounts payable for past
services rendered by vendors that are overdue and, while those vendors have exhibited patience in waiting to get paid, there is a risk
that one or more of them could initiate litigation against us in an attempt to force payment of the amounts owed. In such a case, the
litigation could cause us to incur significant costs defending such action. A successful suit could also hurt our credit standing, making
it more difficult or expensive for us to secure additional funding or lines of credit in the future. Any penalties or fines associated
with such judgments could also change or increase the amounts we owe or change the timing of payments owed in a way that affects our
projected cash flow or use of proceeds from this offering.

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Our failure to maintain an effective system of internal control over financial reporting could adversely affect our ability to present accurately our financial statements and could materially and adversely affect us, including our business, reputation, results of operations, financial condition or liquidity.

Our independent registered public accounting firm
identified material weaknesses in our internal controls over financial reporting in connection with the preparation of our financial
statements and audit as of and for the year ended December 31, 2023, which relate to a deficiency in the design and operation of
our financial accounting and reporting controls. Specifically, the material weaknesses resulted from (i) a lack of segregation of
duties within the financial accounting and reporting processes due to limited personnel and (ii) a lack of adequate and precise
review of account reconciliations and journal entries resulting in audit adjustments. A material weakness is a deficiency, or combination
of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement
of a company’s annual or interim financial statements will not be prevented or detected on a timely basis.

We have begun to address and remediate such material
weaknesses by hiring a Chief Financial Officer with significant accounting and public company financial reporting and compliance experience.
While we intend to implement additional measures to remediate the material weaknesses, there is no guarantee that they can be remediated
in a timely fashion or at all. Our failure to correct these material weaknesses could result in inaccurate financial statements and could
also impair our ability to comply with the applicable financial reporting requirements on a timely basis. While we believe we have addressed
any regulatory or financial reporting