Company: IPST
Filing Date: 2025-02-04
Form Type: 424B3
Source: 0001213900-25-010139
Chunk: 366

Company: Heritage Distilling Holding Company, Inc.
Filing Date: 2025-02-04
Form: 424B3
Chunk 366
---
 unconditional conversion of the outstanding indebtedness and related
warrants into equity.

<div align='center'>F-76

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

NOTE 16 — SUBSEQUENT EVENTS (cont.)

The Underwriting Agreement and the related warrants
granted to the Underwriter equal to 5% of the total proceeds raised in the offering at an exercise price equal to the offering price.
This number of warrants may increase by up to 15% if the Underwriter elects to utilize the overallotment rights of the Offering.

In February 2024, the Company purchased all
the outstanding stock of Thinking Tree Spirits, Inc. (“TTS”). Under the terms of the stock sale, the Company paid the shareholders
of TTS $670,686 (net of $50,000 held back for post-closing accounting true-ups) using shares of common stock of the Company, and assumed
$364,500 of debt. The $670,686 was paid using common stock of the Company at a negotiated price of $13.16 per share (or 50,972 shares),
subject to a true-up provision that expires August 31, 2024 to the price per share of the Company’s anticipated IPO, if lower, (currently
$5.00, or 134,137 shares). The acquisition will be recorded at a fair value, based on the $670,686 initial payment, and a fair value probability
applied to the contingent earn out payments. The valuation and accounting for this acquisition will be recorded in the Company’s
financial statements for the quarter ended March 31, 2024. The fair value of the acquisition will be re-measured for each subsequent reporting
period until resolution of the contingent earn out payments, and any increases or decreases in fair value will be recorded in the income
statement as an operating loss or gain. Under the terms of the TTS acquisition, TTS shareholders will be eligible to receive contingent
earn out payments from the Company through February 17, 2027 of:

| ● | Up to $800,000 per year (payable in Company common stock) in                                                                         
 each of the first 3 years post acquisition (for an aggregate of up to $2,400,000), calculated as $1.00 worth of Company common stock 
 for every $1.00 of revenue of TTS brands and activities that exceed the previous year’s TTS associated revenue. Shortfalls in