Company: IPST
Filing Date: 2025-02-04
Form Type: 424B3
Source: 0001213900-25-010139
Chunk: 320

Company: Heritage Distilling Holding Company, Inc.
Filing Date: 2025-02-04
Form: 424B3
Chunk 320
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 will continue to be recognized until the warrants are exercised, expire or qualify
for equity classification.

Concentrations of credit risk— Financial
instruments potentially subjecting the Company to concentrations of credit risk consist primarily of accounts receivable, accounts payable
and bank demand deposits that may, from time to time, exceed Federal Depository Insurance Corporation (“FDIC”) insurance limits.
To mitigate the risks associated with FDIC insured limits the Company recently opened an Insured Cash Swap (“ICS”) service
account at its primary bank. Under terms of the ICS, when the bank places funds for the Company using ICS, the deposit is sent from the
Company’s transaction account into deposit accounts at other ICS Network banks in amounts below the standard FDIC insured maximum
of $250,000 for overnight settling. If the Company’s account exceeds the FDIC limit of $250,000 at the end of the business day,
funds are automatically swept out by our bank and spread among partner banks in accounts, each totaling less than $250,000. This makes
the Company’s funds eligible for FDIC insurance protection each day. The funds are then swept back into the Company’s
account at the beginning of the next business day. The aggregate limit that can be protected for the Company under this program is
approximately $150 million.

The Company considers the concentration of credit
risk associated with its accounts receivable to be commercially reasonable and believes that such concentration does not result in the
significant risk of near-term severe adverse impacts. As of December 31, 2023 and 2022, the Company had customers that individually
represented 10% or more of the Company’s accounts receivable. There were two and three individual customers that represented 71%
and 57% of total accounts receivable, as of December 31, 2023 and 2022, respectively. There were four and three individual customer
accounts that represented 64% and 57% of total revenue for the years ended December 31, 2023 and 2022, respectively. There were three
and one individual suppliers that represented 48% and 19% of total accounts payable, as of December 31, 2023 and 2022, respectively.

Accounts receivable— Accounts
receivable are reported at net realizable value. Receivables consist of amounts due from distributors. In evaluating the collectability
of individual receivable balances, the Company considers several factors, including the age of the balance, the customers