Board adopts cryptocurrency reserve policy as part of treasury diversification Bitcoin Bourbon™ pre-launch and giveaway contest unveiledFinTech veteran Matt Swann appointed to Board of DirectorsRedefines CPG Sector to “Crypto Product Goods” GIG HARBOR, Wash., June 05, 2025 (GLOBE NEWSWIRE) -- Heritage Distilling Holding Company, Inc. (NASDAQ: CASK), North America's most awarded craft distillery, is pioneering a new category: Crypto Product Goods (CPG). This marks a shift from traditional consumer packaged ...

GIG HARBOR, Wash., June 03, 2025 (GLOBE NEWSWIRE) -- Heritage Distilling Holding Company, Inc. (NASDAQ: CASK), the most awarded craft distillery in North America for the past ten years, today announced the upcoming launch of Bitcoin Bourbon™: a limited-edition Kentucky straight bourbon whiskey designed to celebrate the spirit of decentralization, the rise of digital currency culture and the future of digital payments for e-commerce retailers. This release coincides with Heritage’s newly adopted Cryptocurren ...

Financial Performance - Total net sales for the three months ended March 31, 2025, were approximately $1,092,000, a decrease of approximately $614,000, or 36.0%, compared to $1,706,000 in the same period of 2024[289]. - The company’s net income (loss) for the three months ended March 31, 2025, was $(3,033,047), compared to net income of $452,839 in the same period of 2024, representing a significant decline[288]. - GAAP total net sales were $1,092,000, a decrease from $1,706,000 in 2024, representing a decline of approximately 36%[323]. - GAAP gross profit for the same period was $272,000, down from $409,000 in 2024, indicating a decrease of about 33.5%[323]. - Adjusted gross profit excluding unabsorbed overhead was $733,000 in 2025 compared to $1,071,000 in 2024, reflecting a decline of approximately 31.5%[323]. - Adjusted EBITDA for the three months ended March 31, 2025, was $(2,213,000), compared to $(1,906,000) in 2024, indicating a worsening of approximately 16.1%[327]. Sales and Marketing - Direct-to-consumer sales are conducted in 46 states, covering approximately 96.8% of the U.S. population, allowing for higher-margin sales and valuable consumer data collection[255]. - Sales and marketing expenses are anticipated to increase as the company expands its headcount and marketing campaigns[271]. - Sales and marketing expenses rose to approximately $1,315,000 in Q1 2025, an increase of $125,000 compared to $1,190,000 in Q1 2024[308]. - The Salute Series and Military DtC Spirits saw a unit sales growth of 107.8% year-over-year, while revenue growth was 76.8%, attributed to a broader selection of lower-priced products[295]. Cost Management - The cost of oak barrels has escalated by approximately 30% since early 2022, but prices began to stabilize in 2024[261]. - The company expects gross margins to fluctuate over time due to market conditions, pricing, and cost structure[270]. - The company aims to reduce unabsorbed overhead and improve gross margins by focusing on higher-margin products and optimizing production capacity[301]. - Gross profit excluding unabsorbed overhead for Q1 2025 was approximately $485,000, a decrease of 28.8% from $681,000 in Q1 2024[305]. - Gross margin excluding unabsorbed overhead increased to 67.1% in Q1 2025 from 62.8% in Q1 2024, indicating improved cost management[306]. Operational Challenges - Operating loss for the three months ended March 31, 2025, was $(2,451,177), compared to $(2,226,870) for the same period in 2024, reflecting an increase in operating expenses[288]. - The decrease in net sales of services was approximately $220,000, with third-party production sales dropping from $111,000 in Q1 2024 to $6,000 in Q1 2025, and retail services decreasing from $300,000 to $239,000[294]. - Unabsorbed overhead as a component of product cost was 56.6% in Q1 2025 compared to 54.5% in Q1 2024, indicating ongoing challenges in capacity utilization[300]. Investment and Financing - The company expects to incur additional losses and higher operating expenses as it continues to invest in inventory and assets for growth[328]. - The Silverview Loan, originally maturing on April 15, 2025, has been extended to October 25, 2026, with a fixed interest rate of 15.0% per annum[338]. - As of the IPO date (November 25, 2024), the outstanding principal balance on the Silverview Loan was $12,250,000, with approximately $1,568,000 paid towards principal, leaving an outstanding balance of approximately $10,682,000[340]. - The company expects to remain in compliance with all financial covenants in the Silverview Loan agreement after using approximately $2,375,000 of the net proceeds from the IPO to repay a portion of the loan[341]. Market Position and Growth - The craft spirits segment generated revenues of over $21.4 billion in 2023, with an estimated CAGR of 29.4% from 2024 to 2030[252]. - The craft spirits market is the fastest-growing segment of the overall $288 billion spirits market, positioning the company for significant growth opportunities[252]. - The company has developed a new sales channel in collaboration with Native American tribes, which is expected to broaden brand recognition and sales[257]. Compliance and Regulatory - The company is currently not in compliance with Nasdaq's minimum bid price requirement, with a compliance period until October 13, 2025, to regain compliance[334]. - The provision for income taxes was immaterial for both Q1 2025 and Q1 2024 due to a net loss position[316]. Miscellaneous - The company has recognized an aggregate of $2,684,395 in previously-unrecognized compensation expense for RSU awards upon completion of its IPO[273]. - The company retained a 12.2% ownership interest in Flavored Bourbon, LLC, with a guaranteed payout of $25.3 million upon a third-party sale of the brand[278]. - The company recorded a gain of $3,421,000 on the increase in fair value of its investment in Flavored Bourbon, LLC for the six months ended June 30, 2024[278]. - The company had no off-balance sheet arrangements as of March 31, 2025[352]. - The company is exposed to market risks from fluctuations in interest rates, which may adversely affect operations and financial condition[361].

Core Viewpoint - Heritage Distilling Holding Company aims to lead the craft spirits e-commerce sector by accepting Bitcoin and Dogecoin as payment and holding them as strategic assets [1][2][3] Group 1: Cryptocurrency Policy - The Cryptocurrency Policy allows Heritage to accept Bitcoin and Dogecoin for products and services through its direct-to-consumer e-commerce platform [1][2] - The policy is based on the belief that Bitcoin is a long-term strategic asset, while Dogecoin is gaining popularity for transactions due to its substantial user base [2] - Estimates suggest that between 65 to 86 million Americans hold Bitcoin, and approximately 83 million wallets hold Dogecoin, presenting a growing opportunity for Heritage [2] Group 2: Leadership and Innovation - Matt Swann, chair of the Board's Technology and Cryptocurrency Committee, emphasizes the potential of cryptocurrencies to reduce friction in commerce [3] - CEO Justin Stiefel highlights Heritage's innovative approach in the craft spirits space by preparing to accept cryptocurrencies and leveraging them as assets [3] - The company expects that acceptable margins between retail prices and production costs will mitigate potential volatility in cryptocurrency values [3] Group 3: Company Background - Heritage Distilling is recognized as one of the premier independent craft distilleries in the U.S., offering a diverse range of spirits and has been awarded multiple accolades [4] - The company is expanding its presence nationwide through various sales channels, including e-commerce and a unique collaboration with Native American tribes known as the Tribal Beverage Network [4] - This initiative aims to create economic and social benefits for tribal communities while enhancing Heritage's commitment to innovation and sustainable growth [4]

Core Viewpoint - Heritage Distilling Company is launching a limited edition bourbon, "De Oppresso Liber," to honor the Green Berets, with a portion of sales proceeds going to the Green Beret Foundation, aiming to generate over $500,000 in revenue [3][4]. Group 1: Product Launch and Details - The new bourbon is a 5-year Kentucky straight bourbon bottled at 122 proof (61% ABV), commemorating the year 1961 when President JFK authorized the green beret for the U.S. Army Special Forces [3][4]. - Each bottle is priced at $145, with $20 from each sale donated to the Green Beret Foundation, potentially exceeding $100,000 in total donations if all 5,000 bottles are sold [4][5]. - The launch is part of Heritage's Salute Series, which honors military personnel and first responders, having already contributed over $200,000 to various charities in the past 18 months [5]. Group 2: Company Background - Heritage Distilling is recognized as one of North America's most awarded craft distilleries, having received numerous accolades over the past decade [6]. - The company is expanding its market presence through various sales channels, including e-commerce and partnerships with Native American tribes, enhancing community engagement and economic benefits [6]. Group 3: Partnership with Green Beret Foundation - The Green Beret Foundation is a non-profit organization dedicated to supporting U.S. Army Special Forces soldiers and their families, ensuring they have access to necessary resources [7]. - The partnership with Heritage aims to celebrate the legacy of the Green Berets and provide ongoing support to their community [4][7].

Compliance with Nasdaq - Heritage Distilling Holding Company has regained compliance with Nasdaq Listing Rule 5250(c)(1) after filing its 2024 Annual Report on Form 10-K on April 28, 2025 [1][2] - Nasdaq staff confirmed that no further action is required from the company regarding this compliance matter [2] Company Overview - Heritage Distilling is a leading independent craft distillery in the United States, offering a variety of spirits including whiskeys, vodkas, gins, rums, and ready-to-drink cocktails [3] - The company has been recognized as North America's most awarded craft distillery for ten consecutive years by the American Distilling Institute [3] - Heritage is one of the largest craft spirits producers on the West Coast by revenue and is expanding its presence nationwide through various sales channels, including wholesale, on-premises venues, e-commerce, and the Tribal Beverage Network (TBN) [3] - The TBN initiative collaborates with Native American tribes to develop Heritage-branded distilleries and unique tribal brands, creating economic and social benefits for participating tribes [3]

Core Insights - Heritage Distilling Company achieved a transformative year in 2024, transitioning to a publicly traded company with an IPO on Nasdaq, resulting in positive EBITDA and net income for the first time in its history [2][4] - The company reported a topline revenue increase of 26.4% in Q4 2024 compared to Q4 2023, reaching over $3 million, and a year-over-year revenue growth of 5.4% for the full year [1][6] Financial Performance - Full year 2024 EBITDA was $4,539,962, a significant improvement from a negative EBITDA of $(32,834,439) in 2023 [6][8] - Net income for 2024 was $710,458, or $0.05 per share, compared to a net loss of $(36,798,419) in 2023 [6][8] - Revenue for 2024 was approximately $8,402,488, up $431,264 or 5.4% from $7,971,224 in 2023, primarily driven by a 28.8% increase in product sales [7][8] Operational Highlights - The company reduced total liabilities by $42,482,429 year over year, significantly improving its balance sheet [10] - Cash-based operating expenses were reduced by $1.1 million in 2024 compared to 2023, with a focus on higher-margin products and services [9][12] - The company expanded its market presence into Colorado, Kentucky, and Oklahoma, and launched new products, including the successful Salute Series brand [3][6] Strategic Initiatives - Heritage Distilling plans to continue its growth trajectory in 2025, with preliminary Q1 results looking promising and additional annualized cost reductions of over $1 million being implemented [4][12] - The company has established a Tribal Beverage Network (TBN) to develop Heritage-branded distilleries and tasting rooms in collaboration with Native American tribes, enhancing its market reach [17]

Financial Performance - The craft spirits segment generated over $21.4 billion in revenue in 2023 and is projected to grow at a CAGR of 29.4% from 2024 to 2030[23]. - The company has sold over 23,000 bottles of its Salute Series products since launch, generating more than $1.8 million in revenue[30]. - The company has experienced operating losses of $(14,918,810) and $(11,264,559) for the years ended December 31, 2024 and 2023, respectively, with an accumulated deficit of $74,134,018[92]. - The company anticipates that more than one-third of its annual revenue will be earned in the fourth quarter of each year[90]. - The company expects significant increases in wholesale revenues and margins in 2025 and beyond by focusing on higher-margin products[51]. - The RTD segment is projected to reach $2.4 billion in revenue by 2030, with a CAGR of 13% from 2020 to 2030[46]. - The company has incurred recurring operating losses and negative cash flows since inception, raising substantial doubt about its ability to continue as a going concern without additional financing[94]. - The company expects to continue incurring substantial losses and negative cash flow from operations for the foreseeable future[114]. Market Expansion and Distribution - The company has expanded its direct-to-consumer sales to 46 states, reaching approximately 96.8% of the U.S. population[26]. - The company has secured new wholesale distribution in Kansas, Kentucky, and parts of Colorado, beginning in Q3 2024[31]. - The company plans to leverage direct-to-consumer sales through online platforms and tasting rooms to grow brand recognition and high-margin revenue[37]. - The company plans to utilize new technologies to reach consumers in over 46 states through direct-to-consumer sales in 2024[52]. - The company has entered agreements with multiple tribes for branded tasting rooms, including a new facility at the Stillaguamish Tribe's casino opening in October 2024[57]. - The company plans to expand its ready-to-drink canned cocktails into national distribution[92]. - The TBN model aims to create a national network of tribal spirits production and retail operations, benefiting from tax exemptions and regulatory advantages[37]. Product Development and Innovation - The company plans to launch additional military-themed products under the Salute Series, following the success of previous releases[30]. - The company has launched innovative products like Cocoa Bomb, which was recognized as "World's Best Flavored Whiskey" in March 2025[44]. - The company has developed a technology and Cryptocurrency Committee to explore accepting bitcoin as a payment method, potentially broadening its customer base[26]. Regulatory and Compliance Challenges - The company is subject to extensive regulations by federal, state, and local authorities regarding the production and distribution of alcoholic beverages[76]. - The company has contracted with a third party to manage regulatory licensing and renewal activities, enabling it to distribute products in all 50 states[78]. - The company may face challenges in securing and maintaining product listings in control states, which could significantly decrease sales[132]. - The company is currently involved in litigation related to dissenters' rights from the acquisition of Thinking Tree Spirits, with one claim still unresolved[180]. Risks and Challenges - The company faces significant competition in the craft spirits industry, competing against established brands with more robust resources, which may pressure selling and marketing expenses[119]. - A reduction in consumer demand for spirits due to demographic shifts or economic conditions could adversely affect the company's financial results[122]. - The company relies heavily on third-party distributors for sales, and any loss of significant distributors could materially impact its business[128]. - Supply chain disruptions and fluctuations in raw material prices could adversely affect the company's operating costs and profitability[135]. - The company may face reputational harm and financial risks from litigation related to the alcoholic beverage industry, including product liability and marketing practices[186]. Technology and Data Security - The company is testing the use of Artificial Intelligence (AI) in marketing efforts, which may not yield satisfactory returns on investment[198]. - Increased IT security threats pose risks to the company's data integrity and could lead to significant financial and reputational damage[197]. - The company must navigate evolving data protection laws, such as the California Consumer Privacy Act, which may require additional compliance expenditures[209]. Strategic Partnerships and Collaborations - The Tribal Beverage Network (TBN) is expected to enhance brand recognition and sales through collaborations with Native American tribes[29]. - The TBN model could generate $350 million to $450 million annually for participating tribes, with the company earning royalties of approximately $35 million to $45 million[55]. - The company is exploring various collaborative arrangements, including partnerships and co-branding, to enhance sales and market presence, but these carry risks of lower-than-expected revenue[182]. Intellectual Property and Brand Management - The company has been granted over 75 trademark registrations in the United States to protect its brand and products[83]. - The company faces challenges in protecting its intellectual property, which is crucial for maintaining competitive advantage[218]. - Intellectual property infringement claims could result in significant damages, including treble damages if found willful, and may require the company to divert resources to develop non-infringing alternatives[219]. Financial Strategy and Capital Needs - Future capital needs are uncertain, and the company believes it will need to raise additional capital in 2025 to cover expenses and meet growth objectives[97]. - The company has no credit facilities and may seek additional capital through private and public equity offerings, debt financing, and strategic collaborations[96]. - The company may face significant dilution of existing stockholders' ownership if additional funds are raised through equity or convertible debt securities[96].

Financial Performance - Total net sales for the three months ended September 30, 2024, were approximately $1,761,434, a decrease of $326,596 or 15.7% compared to $2,088,030 for the same period in 2023[276]. - Product sales increased by approximately $186,000 or 15.6% to $1,375,230 for the three months ended September 30, 2024, driven by the launch of the Salute Series product line[280]. - Service sales decreased by approximately $512,412 or 57.1% to $386,204 for the three months ended September 30, 2024, primarily due to the termination of a third-party bottling contract[280]. - Total net sales for the nine months ended September 30, 2024, were approximately $5,310,000, a decrease of $215,000, or 3.9%, compared to $5,525,000 for the same period in 2023[299]. - Product sales increased by approximately $678,000, or 20.1%, to approximately $4,051,000 for the nine months ended September 30, 2024, compared to $3,373,000 for the same period in 2023[302]. - Service sales decreased by approximately $894,000, or 41.5%, to approximately $1,259,000 for the nine months ended September 30, 2024, compared to $2,152,000 for the same period in 2023[302]. - The company reported a net income of approximately $5,526,000 for the nine months ended September 30, 2024, a significant improvement compared to a net loss of $(31,642,000) for the same period in 2023[325]. Cost and Expenses - Cost of sales decreased by approximately $240,685 or 17.5% to $1,131,691 for the three months ended September 30, 2024, compared to $1,372,376 for the same period in 2023[276]. - General and administrative expenses are expected to rise due to public company compliance costs and infrastructure enhancements to support business growth[264]. - Sales and marketing expenses decreased by approximately $199,000 to approximately $1,271,000 for the three months ended September 30, 2024, compared to $1,470,000 in 2023[288]. - General and administrative expenses increased by approximately $136,000 to approximately $1,439,000 for the three months ended September 30, 2024, compared to $1,303,000 in 2023[290]. - Sales and marketing expenses decreased by approximately $803,000 to $3,760,000 for the nine months ended September 30, 2024, compared to $4,563,000 for the same period in 2023[310]. - General and administrative expenses decreased by approximately $1,371,000 to $4,632,000 for the nine months ended September 30, 2024, compared to $6,003,000 for the same period in 2023[311]. Profitability Metrics - Gross profit for the three months ended September 30, 2024, was $629,743, down from $715,654 in 2023, reflecting a decrease of $85,911[276]. - Gross profit increased by approximately $396,000, or 28%, to approximately $1,786,000 for the nine months ended September 30, 2024, compared to $1,390,000 for the same period in 2023[308]. - The gross margin improved from 34% in Q3 2023 to 35% in Q3 2024, indicating a successful shift towards higher-margin activities[277]. - The gross margin improved to approximately 33.6% for the nine months ended September 30, 2024, compared to 25.2% for the same period in 2023[308]. Strategic Initiatives - The company aims to expand its wholesale distribution by leveraging brand recognition gained through DtC sales, which supports larger-scale growth across retail chains[253]. - Collaboration with Native American tribes through the Tribal Beverage Network (TBN) is expected to enhance brand recognition and sales, with royalties on gross sales from tribal-owned businesses[254]. - Management plans to shift focus from low-margin third-party production to opening more TBN locations and increasing high-margin DtC sales of the Salute Series line, aiming for significant revenue gains[309]. - The company expects overall gross margin to increase as more high-margin products are added to the wholesale distribution channel[286]. Market Trends and Challenges - The craft spirits segment generated over $21.4 billion in revenue in 2023, with an estimated CAGR of 29.4% from 2024 to 2030[249]. - The company plans to manage inflationary pressures on raw materials and labor costs while adapting to changing consumer preferences for premium products[256]. - The company has experienced a 30% increase in oak barrel costs since early 2022, but has seen a significant reduction in the price of quality aged bourbon barrels, which may lower input costs for premium products[256][257]. Financing and Cash Flow - The company expects to fund operations and expansion plans into at least the third quarter of 2025 using net proceeds from its IPO and cash generated from sales[328]. - The company reported a net cash provided by financing activities of $6,210,000 for the nine months ended September 30, 2024, compared to $6,047,000 for the same period in 2023[336]. - The company incurred net cash used in operating activities of approximately $(6,228,000) for the nine months ended September 30, 2024, compared to $(6,068,000) for the same period in 2023[336]. - The company has been out of compliance with various financial covenants under the Silverview Loan but received waivers for past defaults and breaches as of October 1, 2024[327]. Company Status and Compliance - The company is classified as an "emerging growth company" and has elected to use an extended transition period for complying with new or revised accounting standards[353]. - The company will cease to be an emerging growth company when total annual gross revenues reach $1.235 billion or more[354]. - There is uncertainty regarding investor perception of the company's common stock attractiveness post-emerging growth status, which may affect trading activity and share price volatility[355].