Company: IPST
Filing Date: 2025-02-04
Form Type: 424B3
Source: 0001213900-25-010139
Chunk: 314

Company: Heritage Distilling Holding Company, Inc.
Filing Date: 2025-02-04
Form: 424B3
Chunk 314
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'>The accompanying notes are an integral part of these consolidated financial statements.

F-47

Heritage Distilling Holding Company, Inc.
Notes to Consolidated Financial Statements</div>

NOTE 1 — DESCRIPTION OF OPERATIONS AND BASIS OF PRESENTATION

Description of operations— Heritage
Distilling Holding Company (“HDHC” or the “Company”) is a Delaware corporation, for the purpose of investing in,
managing, and/or operating businesses that are engaged in the production, sale, or distribution of alcoholic beverages. The Company is
headquartered in Gig Harbor, Washington and has one wholly owned subsidiary, Heritage Distilling Company, Inc., (“HDC”) that
is included in the consolidated financial statements.

HDC has operated since 2011 as a craft distillery
making a variety of whiskeys, vodkas, gins and rums as well as RTDs and operates distillery tasting rooms in Washington and Oregon.

Business Combination Agreement —On
December 9, 2022, the Company entered into a business combination agreement (as amended, the “Business Combination Agreement”)
with a publicly-traded special purpose acquisition company (“SPAC”). On May 18, 2023, the Business Combination Agreement
was terminated and deferred expenses related to the transaction were expensed. Subsequent to the termination of the Business Combination,
the Company contemplates an initial public offering (“IPO”).

Basis of Presentation— The
accompanying consolidated financial statements have been prepared in conformity with accounting principles generally accepted in the United States
of America (“U.S. GAAP”) and include the Company’s wholly-owned subsidiary. All intercompany transactions and balances
have been eliminated in the consolidation process. Certain accounts relating to the prior year have been reclassified to conform to the
current period’s presentation. These reclassifications had no effect on the net loss or net assets as previously reported.

Stock Split— On May 14,
2024, the Board and Shareholders of the Company approved a .57-for-1 reverse stock split. All share and per share numbers included in
these Financial Statements as of and for the years ended December 31, 2023 and 2022 reflect the effect of that stock split unless otherwise
noted.

Liquidity and Going Concern— The accompanying
consolidated financial statements have been prepared in conformity with U.S. GAAP, which contemplate continuation of the Company as a
going concern. The Company’s recurring net losses, negative working capital, increased accumulated deficit