Company: IPST
Filing Date: 2025-12-23
Form Type: 424B3
Source: 0001213900-25-125341
Chunk: 127

Company: Heritage Distilling Holding Company, Inc.
Filing Date: 2025-12-23
Form: 424B3
Chunk 127
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 our operating results in accordance with GAAP. We currently own approximately 53.2million $IP Tokens, some of which were acquired at a significant discount to the then market value, and which may be written down to a lower cost per token at any time that the market value of $IP Tokens is lower (impaired) from the previously -recordedcost. For each reporting period, our $IP Token treasury will be reflected at the market price of $IP Tokens and the aggregate change in the fair value of our treasury of $IP 73 Tokens will be reflected as a gain or loss in our consolidated statement of operations. For each reporting period, our consolidated statement of operations will reflect a net gain or loss commensurate with the respective change in market value of a $IP Token (across the number of $IP Tokens that we hold in our treasury). Accordingly, assuming the number of $IP Tokens we hold remains constant at approximately 53.2million, every $1.00 increase in the market value of a $IP Token will represent a gain of approximately $53.2million that we must recognize; and, conversely, every $1.00 decrease in the market price of a $IP Token will represent a loss of approximately $53.2million that we must recognize. The more the $IP Token price increases or decreases in the market, the greater the gain or loss we will be required to report, and depending on market conditions from quarter to quarter, we could see significant swings in gains or losses simply due to marking the value of the $IP Tokens we hold to their market value. Pricing, Product Cost and Margins To date, most of our revenue has been generated by retail sales of our spirits in our retail tasting rooms and through our eCommerce platform. Going forward, we expect to sell our products in a variety of vertical industry markets in partnership with our distributors across states and geographic regions, and direct to consumers via third -partyFulfillment partners. Pricing may vary by region due to market -specificdynamics and various layers of taxes applied by the states at the different steps of distribution and retail sales. As a result, our financial performance will depend, in part, on the mix of our sales in different markets during a given period and our ability to scale efficiently. We have experienced modest inflation in some of our raw inputs, particularly in grains, bottles, cans and barrels over the last four years. During the summer of 2025, we re -evaluatedour sourcing practices for raw inputs given